How to Repair Poor Credit History Using Credit Cards

Information verified correct on October 23rd, 2016
poor credit history

How credit cards could help to repair poor credit history

If you have poor credit history and you’ve struggled to pay off your credit cards in the past, you might believe it will be almost impossible for you to apply for a new credit card.

People with bad credit ratings often already understand the effect this can have on their financial future. It’s much harder for them to obtain unsecured loans or even apply for a mortgage. However, you might not have realised it could also impact your insurance policy and the premiums you pay.

Landlords and rental agents will also take a look at your credit history to determine if you’ve been a bit forgetful about paying your bills in the past. Unfortunately, there are also some employers who will require employees to have a good credit history too.

So if you already have poor credit history records, what can you do to put it right?

If you’ve tried to look up information online about fixing bad credit, you might have learned a lot about credit scores and various things you can do to raise it which follows the American credit reporting system. In Australia, the equivalent is a VedaScore.

Learn more about Veda Advantage Credit Reporting

The Australian credit reporting agency, Veda Advantage records whether you’re making your payments on time. It also focuses only on listing ‘defaults’ if you miss payments or ‘judgements’ if you’ve been taken to court by a creditor. Obviously, bankruptcies will also show. It will also focus on how many enquiries you make which are listings that show how much credit you’ve applied for in the past five years.

If your credit report shows an ‘unpaid default’, a bank will be very reluctant to approve any credit application at all. This tells them you haven’t paid off your overdue bills at all. Yet, if your credit report can show a ‘paid default’, this is considered a little better in their eyes, even though it still constitutes a poor credit history.

Whenever you use your credit card to pay for purchases, make absolutely sure you repay the amount you spent. It might take you a couple of weeks to pay it down but keep doing this regularly. After a couple of months, you should have statements showing that you’re really trying to stay on track with your financial responsibilities.

The next time you need to apply for finance, you already know the lender will do a credit check on you and see those bad credit listings. But your credit card statements with the good payment history could offer the assessor some way to understand that you’re really getting your finances back on track.

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4 Responses to How to Repair Poor Credit History Using Credit Cards

  1. Default Gravatar
    sam | September 30, 2015

    Hi…I have struggled to pay off my telco bills and that is why I have got payment default …BUT I had talked with debt collector and paid off my all bills…In my Veda report it shows that ” Settled and account closed”…Also In last 4 and half I haven’t applied anything …because of my good weekly income , comb bank sending me a letter to apply credit card…Should I apply or not ?

    • Staff
      Jonathan | October 6, 2015

      Hi Sam, thanks for your inquiry!

      Credit card offers from a bank can be a positive signal for your credit status. Depending on your credit card needs you may like to apply for the card. In terms of your eligibility for this card, to further clarify your chances of being approved it would be best to contact the Commonwealth Bank who can do a ‘credit status’ check without needing a completed application.



  2. Default Gravatar
    andy | April 17, 2015

    i have got unpaid defaults can i get a credit card to start paying those off

    • Staff
      Jonathan | April 17, 2015

      Hi Andy, thanks for your inquiry!

      Unfortunately credit card payments using another credit card are ineligible. You may like to refer to the following link for a list of balance transfer cards and offers.



Credit Cards Comparison

Rates last updated October 23rd, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $59 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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