Highlights

• Improving your credit rating or score in Australia starts with a thorough credit health check.
• One of the keys to improving your credit score is making all loan repayments on time.
• Protect your new year financial goals by monitoring your credit report.

Getting your finances in order is one of Australia’s most popular new year’s resolutions. According to ASIC Moneysmart research, over half (52%) of Australians set financial goals for the year ahead, yet only 12% actually manage to stick to them.

The good news? You can beat those odds by starting with one achievable goal now: a thorough credit health check. Your credit score is an important foundation of your financial future, vital for your borrowing power for big-ticket items like homes and cars.

The festive season is upon us. Before you get lost in the holiday rush, take a moment to conduct this essential check. By taking a few simple, actionable steps now, you can help improve your credit rating or score and credit health when the calendar flips to 2026, positioning you to be among that successful 12%.
 

Step 1: Conduct a credit health check

The first step toward achieving your new year financial goals is knowing exactly where you stand. You can do this by accessing your credit report and reviewing it thoroughly.

In Australia, you are entitled to get a free copy of your credit report once every three months from a credit reporting agency like Equifax.

• Order your report: Visit the credit reporting agency website and follow the steps to request your file.
• Review for errors: Scrutinise every detail on your credit report. Errors, even simple ones like an outdated address or an account that is closed, can drag down your credit score or credit rating. Look for incorrectly listed late payments or, more seriously, signs of identity theft.
• Dispute inaccuracies: If you find a mistake, you have the right to challenge it with the credit provider or the credit reporting agency for free. Requesting a correction to an error in your credit report is an important step to improving your credit score.
   

Step 2: Understand how to improve your credit rating or credit score

Your credit rating or credit score is primarily calculated based on the information held in your credit report, which includes your repayment history. Comprehensive Credit Reporting means that paying your accounts on-time has a positive impact on your score.

Actionable steps to help improve your credit score or credit rating

Building a positive credit profile is all about consistency. Make these habits a permanent part of your financial routine to boost your score:

• Pay everything on time, every time: Set up direct debits or calendar alerts for all financial commitments, including credit cards, personal loans, mobile phone, utility bills and Buy Now Pay Later (BNPL) accounts. Consistent on-time payments are an important factor in your score.
• Understand 'Late Payments':

  If you pay the minimum repayment on a credit account (like a credit card or loan) more than 14 days past the due date, it can be recorded on your credit report as a ‘late payment’. This applies even to small amounts.

  A single late payment is unlikely to cause significant damage, but a pattern of late payments indicates financial stress and may negatively impact your score or rating.

  You have to wait two years before your past late payment history is wiped from your credit report.
   

• Avoid defaults: This is critical because defaults negatively impact your credit score. A default is a debt of $150 and over that is more than 60 days overdue. You have to wait five years before a default is wiped from your credit report. If you are struggling, contact the credit provider immediately to discuss financial hardship options before the debt is officially listed.
• Minimise credit applications: Every time you apply for credit - be it a car loan, credit card, or even a Buy Now Pay Later (BNPL) account - a 'hard enquiry' is recorded. Too many of these in a short period can signal poor credit health to lenders, negatively impacting your overall credit score or rating. Space out your applications and only apply when you’re serious about seeking credit.

   

Step 3: Protecting your credit health in 2026

Achieving your new year financial goals is about more than just payment habits; it’s about proactively protecting yourself from threats to your identity and financial standing.

Enhance Your Credit and Identity Protection

Identity theft is a growing concern that requires constant vigilance. To protect your credit score leading into 2026, consider subscribing to an Equifax credit and identity protection plan (if you haven’t already done so). This service includes alert notifications  when key changes are made to your credit report, monthly score updates, and other features like dark web monitoring and up to $15,000 insurance with Identity Guard. This level of monitoring can help you detect fraud early and potentially defend against someone attempting to impersonate you.

By implementing these actionable steps today, starting with a thorough credit health check, you are setting the stage to help improve your credit score and rating throughout the coming year. This preparation is the foundation for achieving your new year financial goals for a financially secure and successful 2026.
 

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.