Credit Ratings: What is ‘Bad Credit’ and ‘Good Credit’?

Rates and Fees verified correct on March 26th, 2015

What are credit card ratings?

One of the most frequently asked questions we receive at Credit Card Finder® are those about credit ratings, particularly the affects and influence of having ‘bad credit’.

Whenever you make a financial move, whether it be an enquiry, application, repayment, or file for bankruptcy, it is being recorded in your own personal credit file. In Australia, this credit file is organised by Veda, Dun & Bradstreet and Tasmanian Collection Service.

If you see a listing on your credit rating that has been unfairly added, should not be showing up, or has been incorrectly added, you have a good shot at getting your file repaired.

If you have a bad credit rating, it can be difficult for you to attain credit in Australia.

If you are struggling with unsecured debts, you may want to consider speaking with a company that specialises in helping people consolidate their debts. Some examples include Princeville Credit Advocates and their ability to help remove credit defaults and judgement listings, and Fox Symes. Read more about Fox Symes debt solution options here.


My Credit File/Veda

What Is My Credit History Used For?

When you make an application for finance, including credit cards, personal loans and mortgages, the financial lender or bank you’ve applied with has the right to see your credit file.

By viewing your financial history, it gives them an impression of how trustworthy and reliable you truly are, or whether you’re too risky to lend to.

It also contains:

  • Date account opened
  • Current account limit
  • Nature of credit
  • Date account closed
  • Account payment history

Why Should I Look At My Credit History?

If you had to apply for a credit card or a loan tomorrow, would you be approved? You never know when you might be in need of a little additional financing. In order to be prepared for any unexpected events that might occur, you should review your financial records so that you know where you stand in terms of your credit history.

When you know the status of your credit file, you will have less worry when it comes to events that require more financing, because you will know that you will get approved.

What’s in my credit file?

Your credit report from Veda features :

  • Personal details: Including your name, gender, your history of residence/current residence, drivers licence details, date of birth
  • Credit applications: The type and amount of credit you’ve applied for along with any enquiries you have made in the previous five years.
  • Credit accounts: Any financial accounts which are current and open.
  • Credit Defaults: Any overdue or late account action may have been listed against your credit report.
  • Bankruptcy: Whether or not you have ever filed for bankruptcy.
  • Judgments: Your financial decisions and other general public record information.

What should I look for in my financial records?

Errors can be a huge hindrance when it comes to applying for credit cards and other types of financing. These are some of the biggest things that you should be on the look out for

  • Any outdated income information
  • Any outdated employer information
  • Negative statuses for repayments that have been rectified but not updated in your file

Does my credit file have my credit rating on it?

Australians never had a ‘credit rating’ or ‘credit score’, but this has recently changed with the addition of the VedaScore, which is a score placed on your credit from 0 to 1200. Banks and lenders will take this score into account when judging your credit-worthiness, which often involves assigning a credit score of their own when assessing new applicants.

Why was my application for credit rejected?

This is usually because the lender you applied with believed you would not be a suitable borrower for a number of reasons. Maybe they think you pose too much of a liability risk to them, or do not meet the financial requirements necessary for their product.

This could be due to a number of reasons, including but not limited to:

  • Having overdue accounts and defaults on your credit accounts.
  • Incorrect information recorded on your credit report.
  • Fraudulent use of your credit card resulting in defaults.

How long are defaults and personal details kept on my personal file?

  • Applications for finance and credit - are kept for five years.
  • Overdue accounts and defaults - are kept for five years.
  • Bankruptcy files - are kept for seven years.
  • Judgments from the court - are kept for five years.
  • Writs and summons - are kept for four years.
  • Identity information - is permanent.
  • Out of date information - is generally cleared on a monthly basis.
  • Payment history - cannot be held for longer than two years after the account it closed
  • Infringements - are kept up to seven years.
  • Any credit enquiry - are kept for five years 

There is a certain process that needs to be followed to get it done correctly and you may need to call in the help of a professional.

How to fix your credit rating

While there is a process that you can follow in order to get credit repair accomplished on your own, it is not recommended that you do it yourself. A lot of people try to do it themselves and don’t get the results expected. There is certain proof required and other documents so it is much better to hire a credit file repair specialist. It is not a good idea to take any kind of chance with your credit rating especially if you see errors on your credit file that affect your credit rating.

How to look for errors

There are three agencies in Australia that process credit reports. Veda has one of the largest consumer databases in Australia. Tasmanian Collection Service and Dunn & Bradstreet are also agencies for credit reporting in this country. You can simply send an email or write them a letter requesting your credit file and you will receive a copy of it in approximately 10 working days.

Once you have a copy of your report, you can look through it for any listings that should not be appearing. If you see any you should take notes and look for evidence that proves that the listing was added in error. At this stage you can get a professional to try to remove any incorrect listings on your behalf.

What you will see on your credit file?

As you look through the file you will see any applications you have made for credit cards, loans, mortgages, and any other type of credit. You will also see the number of times you have filled out an application for credit and the value of the loan and what kind of finance was applied for.

Understanding your credit file

Any time that you make an application for anything on credit, including credit cards, loans, and mobile phones, it is recorded on your credit file.

You will find detailed information on your file concerning what companies you have applied with, how much you are asking for, and how many applications you have sent out.

The information that you see on your credit file is the same information that lenders see when they are deciding whether or not to approve a loan. If your credit history looks good then you may receive approval and if it is bad you will be declined.

Reports are given to the credit agencies regarding your handling of credit. It is important to find out what others are saying and writing about you on your credit file. This is your personal financial history and you do have some control over it.

If you are late for any payments or miss a payment entirely, it will be recorded on your file. This includes payments to utility companies as well as mobile phone companies so you must make sure that all payments are made in a timely fashion. Loan defaults and applications for bankruptcy will also appear on your statement. On the other hand, if you have been good with credit, that will show up as well.

If any of the above situations apply to you or you simply haven’t looked at your credit file for a long time, you should request a copy of it as soon as possible. It’s your responsibility to keep your credit file in good shape and to report any suspicions of fraudulent activity immediately.

Why you need credit file repair

Here are some of the top benefits of getting your file repaired as quickly as possible.

  • Get your finances back in control.
  • Get a better interest rate on any future loans.
  • Get a higher credit limit on credit cards.
  • Get better terms when it’s time to refinance.
  • Get approved for loans instead of being declined.

It is important to regularly check and maintain your credit rating and file. You should take a look at your file at least once a year to make sure that everything looks good and that nothing has been added in error.

What happens if I have bad credit?

If you have a generally negative credit file with plenty of defaults and overdue accounts, banks will be less inclined to lend to you as you pose more of a risk to them.

You may be rejected from your applications for credit, or have to at least compromise with a higher interest rate (to compensate for the ‘higher risk’ of the bank lending to someone who is more prone to credit defaults).

During the 5-7 years you’ll have to wait for your black marks to be erased, treating the credit you own responsibly will improve your file.

If you want to take out another loan during this time, it may be a good idea to open a savings account with the lender you’re interested in, and making regular savings. This will go someway to demonstrating you know the value of saving and have changed your ways.

What happens if I have good credit?

If you have been responsible on your credit repayments and acted responsibly with your credit, you should have a strong credit standing. This will open you up to easier approval for financial products and might put you in a position to negotiate lower interest rates with your banks.

Tips on how to maintain a good credit file

If you have any type of credit, you possess a credit file.

There are a few ways in which you can ensure that you don’t get a bad credit rating. The most obvious one is to be a responsible individual and pay your bills on time. Be proactive and check your credit report and make sure that it does not have any errors on it that will affect your chances of getting additional credit. You should always know your credit rating.

Creditor mistakes

Most people believe that if they pay their bills on time, they will never have problems with their credit reports. However, this is not always the case. In a perfect world, your credit history should be properly updated each time that you make a payment. However, creditors have been known to make mistakes from time to time in reference to updating your credit history.

Unfortunately, many people do not realise that these mistakes have given them a bad credit rating until they apply for a new loan. That is the wrong time to find out because if you have already applied for the loan, you will be denied because of a mistake that was on your credit report. In addition, this denial will be placed as a permanent part of the credit file. This denial could have been prevented if the credit report error had been found before the application was filed. This is why it is important to always know your credit rating. Find and correct all mistakes before you apply for new credit.

Check your credit history

By law, you are entitled to see what is in your credit file for free. You can get a free copy of your credit report by filling out the form on the credit bureau website and mailing it to them. They’ll then send you a report also by mail. Credit bureaus will try to get you to pay for your credit report by providing you a near instant copy via email or additional analysis. Regardless of how you get it, check it for blemishes and either ask your creditor to correct any mistakes that you might find or seek professional help. This is the best way to ensure that you do not have a bad credit rating. Know your credit rating before you attempt to apply for any new credit. If you fail to do this, this could put even more blemishes in your credit file.

Having good credit is just as simple as being responsible and making sure that your bills are paid on time within the terms of service. In addition, you should also be proactive and monitor your credit file on a regular basis. This will ensure that there will not be any future surprises that could stop you from getting the credit that you need.

What are my credit cards options if I have bad credit?

Approval for a credit card application can be easy if you have little or no credit file let alone a good credit file. Unfortunately in Australia credit card approval for bad credit applicants is tough, particularly during the economic downturn.

My financial position is quite poor. I don’t think I could meet the requirements for any credit card.

Are you finding your debts hard to handle and finding it harder to find a good debt consolidation program?

You know that your credit file is checked each time you apply for a credit card or a mortgage or any type of credit. Creditors will get a bird’s eye view of your report, but how often do you see it?

Just like a car needs regular maintenance, the same can be said for your credit file. Checking in on your credit report regularly will help you to maintain it and keep it free of errors and misinformation.

How often should you check your file?

If you are looking for information on your credit file, you will find that a lot of places can offer you an instant credit report, but for a fee. If you are willing to wait a little longer, there are some agencies that can provide you with a copy for free. You can request a copy whenever you want, which gives you absolutely no excuse for not knowing how your personal financial records stand.

It is a good idea to review your credit file once a month. This means that you can be up to date with any changes and you will notice any errors as soon as they occur. If you don’t want to do this as frequently, then it’s a good idea to review your credit history before you apply for any new financing. This way you will notice any red flags before the potential lenders do.

Checking your credit report is vitally important. Here are some specific times when you should make it a priority.

Check prior to applying for new credit cards

If you have plans to apply for a new credit card or cards, you should get a peek at your file beforehand. If you do so, you will be able to head off any problems before they become an issue. You might find that there are some inaccuracies or misrepresentations so if you check it prior to applying then you can clear them up.

Prior to applying to get a car loan, mortgage or other type of personal loan

It is important to check your credit report before applying for any of these types of loans because if there is some type discrepancy or error, you will want to take care of it before you let a mortgage or car lender take a look at your credit.

After you have been declined credit

If you did not check your file prior to applying for credit and were declined then it is very important that you find out what happened and why. Looking at all aspects of your credit report will give you a clear picture of why you were not a desirable credit candidate.

Prior to marriage or another major life change

Getting married is a major life event. You will be combining many things, i.e. households, lives and money. When you are pooling your resources, it is important to know where both you and your spouse stand in terms of credit worthiness. You should both have your credit pulled before getting married or any other major life change so you have complete information about what you are about to embark upon.

On a regular basis

Your credit file must be maintained but it is not possible unless it is checked at regular intervals. Some choose to check it once a year and others choose to do so more often. What works depends on your situation because there is no hard and fast rule about it.

Once you are fully aware of your credit information, you can then move forward to correct any errors and keep your file as clean as possible.

Click through now and find out how Fox Symes has already helped over 30,000 Australians eliminate their debt problems quickly.

Princeville Credit Advocates are another option, and they help to remove defaults and judgements from your credit report.

Frequently asked questions

Has the global financial crisis made it harder to get credit now?

It has forced banks to become stricter on credit approval criteria, as they can not afford to take on bad debt.

What does a credit rating report look like?

Veda have posted an example credit file which can be viewed

Where can I view my credit file? Does it cost to view my credit file?

Yes. For current pricing you can order a copy from Veda here.

Where can I find out more information about my credit file and history?

This page features a summary of the key points regarding Australian credit files. For more information, visit Veda’s online inquiry

Monitor your credit file to prevent identity fraud

You must also take into account the possibility of identity fraud. If anyone gets a hold of your personal information and uses it for the wrong purposes, it can seriously affect your credit rating. The only way to monitor this type of activity on your credit file is to regularly request a copy of it from the credit agencies.

When you are examining your credit file, take a look at the following list for some possible indications that you have become a victim of fraud.

  • You see a contract for a mobile phone that you did not set up.
  • You are receiving receipts, invoices or bills for items that you never ordered.
  • Entries have been made on the file from businesses that you have never contacted.
  • You are no longer receiving statements for your credit card from your bank.
  • You have recently lost your driver’s license or your passport or have had them stolen.
  • You are receiving mail from debt collectors and you do not recognise any of the debts.
  • You have applied for some kind of financial service but have been declined even though you thought your credit history was fine.
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This page was last modified on 28 January 2015 at 11:01.

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36 Responses to Credit Ratings: What is ‘Bad Credit’ and ‘Good Credit’?

  1. Default Gravatar
    darryl | February 7, 2015

    hi I have bad credit 8 years ago I have always worked how can I get rid of my black name an start again thanks

    • Staff
      Jonathan | February 9, 2015

      Hi Darryl, thanks for your inquiry!

      Please refer to this page for more information on credit repair.



  2. Default Gravatar
    Rebekah | January 9, 2015

    I’m 29 and have never had a credit card in my life. A friend d recently told me that this will effect my credit rating in a negative way. Is that true?

    • Staff
      Jonathan | January 9, 2015

      Hi Rebekah,

      Thanks for your question,

      More information on how credit scores work can be found on this page. Different lenders apply different criteria to your credit application approval, so the lender making the enquiry is factored in when determining your credit score. If you want a copy of your credit file, you have a right to order it from any of the main credit reporting agencies in Australia. Agencies such as Veda, Experian and Dun & Bradstreet can have a copy of your credit file dispatched to you for free within 10 working days, or you can have an urgent copy sent to you for a fee.

      I hope this has helped.



  3. Default Gravatar
    Monica | November 25, 2014

    I had a $4000 credit card with westpac. I got listed in 2011. I haven’t managed to pay off NY debt ..westpac took my file to lion finance in Feb 2011 and in April 2011 lion finance had me listed with Veda. My question is which date will i be cleared by VEda?? Am I required to pay the credit card off even after the debt has been cleared?? Also how long offer the clearance will I be able to borrow again?? My partner and I want to buy a home as soon as possible.

    • Staff
      Elizabeth | November 26, 2014

      Hi Monica,

      Thanks for your question.

      As this has now been passed onto a credit card debt collector, you might want to take a look at this page and this page. These will guide you through the process and also provide some likely scenarios of what is to happen. In terms of the information staying on your file, payment defaults are listed for five years so your debt will be listed on there until 2016.

      I hope this has helped.



  4. Default Gravatar
    Dave | November 21, 2014

    I have been accepted into a management position with a public company, they offer an expenses reimbursement system, however a condition of employment is I must own a credit card, I have not borrowed after bad debts issues for 7 years but my CRA will be rotten any ideas ?can I offer a security to say a bank where I place a cash sum as security etc.

    • Staff
      Elizabeth | November 21, 2014

      Hi Dave,

      Thanks for your question.

      Unfortunately I don’t know any credit card providers who would approve you with a bad credit history. You may be able to talk to your current bank and discuss your situation, and get a letter from your employer explaining how they will manage the repayments, but talk to them to discuss your eligibility before you apply. You also have the option of a charge card or debit card which you may be eligible for.

      I hope this has helped.



  5. Default Gravatar
    Manish | November 6, 2014

    Hi there,

    I was in Australia from 2008 to 2011. I had a great history until I decided to leave Australia.

    When I had to leave Australia for good, I had already taken goods from Jb Hi-fi on credit and also I had to repay Credit Cards.

    Now, I had to leave in short period of time after I decided so I didn’t have enough money to repay all things as I was just a student.

    So, I have Credit cards pending bills, Phone bill, and JB Hi-fi goods bill.

    If I want to apply for a PR again from another country as I already left then would it be possible? Can they stop me arriving in Australia?

    What the worst can it can be?

    Response from your side will be appreciated!


    • Staff
      Elizabeth | November 6, 2014

      Hi Manish,

      Thanks for your question.

      There is a possibility you may be stopped at customs when trying to re-enter Australia, although as this is civil debt and not debt owing to the government this may not happen. You should get in contact with the Citizens Advice Bureau before organising your return to Australia to seek advice on the matter.

      I hope this has helped.



  6. Default Gravatar
    Kate | October 26, 2014

    Hi, I recently applied for a credit card and it was denied due to Veda credit report. I received a copy of my file and it is clean like I thought it was, no defaults etc, but my surname was spelt wrong. Since my credit report was fine could that have been the reason credit was denied?

    • Staff
      Elizabeth | October 27, 2014

      Hi Kate,

      Thanks for your question.

      You may want to get in touch with Veda to get this cleared up, they may be able to better advise on the situation. I’m not sure if this would affect a lender’s decision to approve you, but it’s good to get cleared up. Lenders use a variety of criterion to determine your eligibility for a credit card, including how many open credit accounts you have, your recent applications for credit, etc. So while your credit file may be clean, there may be other listings on there that factor into their decision.

      I hope this has helped.



  7. Default Gravatar
    Mehradzie | September 23, 2014

    Hi there,
    I remember once I have read in this website that applying to multiple credit cards might damage your credit history. However, when I mentioned it to one of my friends which appears tad knowledgeable in this area he pointed out this is only for US and might not be the case here is Australia.

    I just wanted to confirm this and make sure if I apply for credit cards which don’t have an annual fee and I might get to use them one day for the benefits they offer, will this effect my credit history or I should keep mine to the two I already have.


    • Staff
      Shirley | September 26, 2014

      Hi Mehrad,

      Thanks for your question.

      There have been some recent credit reforms that make Australia’s credit rating system similar to those in the US and Europe.

      If you do apply for and own too many credit cards, most credit card providers might see this as a risk and decline your application. However, if you pay them all back in time and don’t carry any debt, then this shouldn’t affect your credit history in a negative way.

      All the best,

  8. Default Gravatar
    Samantha | September 17, 2014

    I have a bad credit rating because I have been the victim of identity thief for an unpaid energy bill for an address that I have never lived at. Who do I contact to sort this out?

    • Staff
      Shirley | September 19, 2014

      Hi Samantha,

      Thanks for your question.

      Please get in touch with a credit reporting agency in Australia to put a fraud alert on your credit report. You’ll be asked to provide information about the fraud, and to check the details of your credit history.

      The reporting agency will then be able to provide further instructions.


  9. Default Gravatar
    Dan | May 22, 2014

    I am currently applying for refinancing and have no defaults or any other bad ratings on my file other than 8 credit enquiries on my file in the last 3.5 years 6 of them where just inquires not applications and 2 where applications that where approved will this affect my score with the banks.

    • Staff
      Shirley | May 23, 2014

      Hi Dan,

      Thanks for your question.

      Unfortunately we don’t have access to that type of information as it’s not readily available to the public. If you have a good credit standing, then you’re eligible for most home loans in the market.

      If you’re concerned about your eligibility, you may want to speak to some lenders without making any formal applications to discuss this.


  10. Default Gravatar
    Kaz | May 1, 2014

    I want to apply for a credit card, I haven’t had one in almost 10 years, however due to my darling ex husband I have “clearout” recorded on my Dunn and bradstreet file, yet my Veda file is clean with a 800+ vedascore. Last December this allowed me to purchase a new vehicle :)

    How can I find out which institutions utilize only Veda for credit checking, and not D&B?

    • Staff
      Shirley | May 2, 2014

      Hi Kaz,

      Thanks for your question.

      Unfortunately we don’t have access to that sort of information. It’s probably best to contact the lenders you wish to borrow from, and enquire if they use Veda or D&B. Sorry that we couldn’t be much of a help.


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