How Do I Know If I Have Bad Credit?

The simplest way to know if you have bad credit is to look — pull your credit report and score, which you can do for free in Australia. As a rough guide, an Equifax score under about 510 out of 1,200 is treated as “below average” to “poor”. But the clearest signs are on the report itself: missed payments, defaults, debts in collections, recent rejections, or a court judgment. Checking your own report costs nothing and never lowers your score.

What does “bad credit” actually mean?

“Bad credit” isn’t a label a single authority stamps on you. It’s a shorthand for a credit history that lenders see as higher risk. Your history is tracked by credit reporting bodies (also called credit bureaus) — the three main ones in Australia are Equifax, Experian and illion. They collect information from banks, lenders and utilities about how you’ve handled credit: what you’ve applied for, whether you pay on time, and whether anything has gone seriously wrong.

That information gets summarised two ways:

• Your credit report — the detailed record: your accounts, repayment history, enquiries, defaults and any court actions.
• Your credit score — a single number that condenses the report into a quick risk signal.

Lenders look at both. A low number can flag concern, but the detail underneath it is what really matters — and it’s where you can spot problems and fix them.

How do I check my credit score and report for free?

Under Australian law you’re entitled to a free copy of your credit report every three months from each bureau, and free again if you’ve been declined credit in the last 90 days. You don’t need to pay a subscription service to see your own file.

• Equifax — request your free report.
• Experian — request your free report.
• illion — request your free report.

It’s worth checking all three, because lenders may report to different bureaus, so your file isn’t always identical across them. Many banking apps and free services also show a score — handy for a quick read, but the official bureau report is the one that shows the full detail.

Checking your own credit is a “soft” enquiry — it has no effect on your score. Only formal applications for credit create “hard” enquiries that lenders can see. For more on reading the detail, see our guide to understanding your credit report.

What’s a bad credit score in Australia?

There’s no single official cut-off, and each bureau uses a different scale, which is why a “good” number on one looks different on another. As a general guide on the widely used Equifax scale of 0–1,200:

So a score in the low hundreds is firmly in “poor” territory, while the high 400s to low 500s sits at the weaker end of average. These bands are guides, not hard rules — lenders set their own thresholds and read your whole report alongside your current income.

What are the signs that I have bad credit?

Even before you see a number, certain things on your report point to a damaged credit profile:

• Missed or late payments recorded against your loans or credit cards.
• Defaults — a debt of $150 or more that’s at least 60 days overdue and that you’ve been notified about.
• Debts sent to collections or sold to a debt buyer.
• Multiple recent credit enquiries — lots of applications in a short window can look like financial stress.
• A loan or card rejection, especially more than one.
• A court judgment or other “serious credit infringement” on your file.

Day-to-day red flags can show up before any of that hits your report, too: regularly relying on one loan to pay off another, only making minimum repayments, or having little to no buffer when an unexpected bill lands.

How long does bad credit last?

The good news is that negative information doesn’t stay forever — it drops off automatically:

• Repayment history information — 2 years.
• Credit enquiries — 5 years.
• Defaults and overdue accounts — 5 years.
• Serious credit infringements and court judgments — up to 7 years.

Once a listing reaches its limit, it’s removed without you having to do anything. Meanwhile, steady on-time payments build a fresh, positive history that gradually outweighs the older marks.

What should I do if I have bad credit?

First, don’t panic — and don’t pay anyone promising to “wipe” your file. You can do the important things yourself, for free.

1. Check every listing carefully. Roughly one in five reports contains an error. If something is wrong — a payment you actually made, a default that isn’t yours, an account you never opened — you can dispute it directly with the bureau or lender for free, and they must investigate.
2. Get current on your bills. Bringing overdue accounts up to date stops the damage growing.
3. Pay on time, every time. This is the single biggest driver of recovery.
4. Space out applications. Each formal application adds a hard enquiry, so apply only when you genuinely need to.
5. Keep balances low relative to your credit limits.

If debt feels unmanageable, talk to a free, independent financial counsellor through the National Debt Helpline on 1800 007 007 — they’re not salespeople and the service costs nothing. For a fuller plan, see our guide on how to repair your credit.

Can I still borrow with bad credit?

Sometimes, yes. Some licensed lenders will consider applicants with a poor history and weigh your current income and affordability rather than your past alone. That’s the basis of the market for loans for bad credit.

Two things to keep firmly in mind. First, approval is never guaranteed — any lender or website promising “guaranteed approval” or “no credit check” is breaking the spirit of Australia’s responsible-lending rules and should be treated as a warning sign. Second, smaller short-term loans (Small Amount Credit Contracts) are capped by law but still costly: a lender can charge up to a 20% establishment fee plus 4% per month. Always weigh cheaper options first.

Perfect Payday is a referral service, not a lender. If you apply through us, your details may be passed to a panel of licensed lenders who assess your situation and make any decision — we don’t set rates or approve loans.

Sources and further reading

• ASIC Moneysmart — free, independent guidance on credit scores, reports and borrowing.
• Office of the Australian Information Commissioner (OAIC) — your credit reporting rights and how to fix errors.
• Equifax, Experian and illion — the three Australian credit bureaus.