A default on your credit report can feel like a major barrier to rebuilding your credit score and getting approved for loans, credit cards or even a rental application. The good news is that, with consistent effort, you can steadily rebuild your credit score and prove to lenders you’re back on track. Here are five actionable habits to help you rebuild your credit score after a default and move your file into lending-friendly territory.
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Check Your Credit Report & Correct Any Errors
Before you begin rebuilding, you need to know exactly what lenders see.
- Obtain a free copy of your credit report from one of the major bureaus (Equifax, Experian or Illion).
- Review every listing for accuracy: balances, payment history, defaults and personal details.
- Dispute mistakes in writing, such as a wrongly attributed default or outdated public record, with both the bureau and the creditor.
- Follow up on disputes until you receive confirmation that the entry has been corrected or removed.
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Register on the Electoral Roll
In Australia, being on the electoral roll is one of the simplest ways to demonstrate stability to lenders.
- Enroll online at aec.gov.au (if you haven’t already).
- Update your address promptly whenever you move, keeping your contact details current helps verify your identity.
- Lenders use roll data to confirm residential history; being off-roll can negatively affect your score.
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Make Every Payment on Time
Payment history carries the most weight in your credit assessment, so punctuality is paramount.
- Automate bill payments wherever possible (utilities, phone plans, credit cards).
- If your budget is tight, prioritise essentials: rent/mortgage, utilities, minimum credit repayments.
- Set calendar reminders at least two days before each due date.
- Even a single late payment can be reported, aim for zero missed or late payments.
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Reduce Your Credit Utilisation Ratio
How much of your available credit you’re using (utilisation) accounts for a large portion of your score.
- Aim to use no more than 30% of your total credit limit across all cards and lines.
- If you carry a high balance, focus on paying it down before using the card for new purchases.
- Ask for a credit limit increase once you’ve demonstrated reliable repayments, this can instantly lower your utilisation ratio.
- Avoid closing old credit cards (even if you don’t use them); keeping them open preserves your available limit.
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Why You Need to Rebuild Your Credit Score After a Default
Showing you can handle different credit types can boost your profile but only if managed sensibly.
- Consider a small, secured credit card or a “credit-builder” loan designed for people with adverse listings.
- Use the new account sparingly, charging a small recurring expense (e.g. a streaming subscription) and paying it off in full each month.
- Avoid loan stacking taking out multiple loans in quick succession looks risky to lenders.
- Over time, a pattern of responsible repayment across varied products demonstrates your creditworthiness.
Rebuilding your credit score takes time, typically six to twelve months of consistent, responsible behaviour before you’ll see significant improvement. By staying on top of your report, keeping payments punctual, and managing your credit utilisation, you steadily shift your file back in your favour.
If you need tailored advice or access to specialist bad-credit lending options, get in touch with our team today and we’ll help you take the next step.
