For many Australians, a credit report is something they only think about when a loan application is declined. But according to Dennis Cowper, Senior Manager at Real Credit Repairers, that reactive approach can cost borrowers valuable opportunities.
“Most Australians check their credit report only after being declined for a loan,” Cowper says. “By then, it’s often challenging to fix issues that might have been easily resolved months earlier.”
Your credit report is one of the most powerful tools in shaping your financial future, yet it’s also one of the least understood. Here are three key insights Cowper says every consumer should know.
1. Every credit enquiry counts
Each time you apply for a loan, credit card, or even a Buy Now Pay Later (BNPL) account, the lender records a credit enquiry on your file. These enquiries can stay visible for up to five years, even if your application is unsuccessful or you decide not to proceed.
“What most people don’t realise is that every application you make is recorded,” Cowper explains. “Multiple enquiries in a short period can signal financial stress to lenders, potentially reducing your chances of approval.”
If you’re comparing lenders or credit products, try spacing out applications by at least three months to protect your credit profile.
2. You can challenge incorrect information
Errors on credit reports are more common than many people realise and they can have a big impact on loan eligibility. Under Australian consumer law, credit providers must investigate and correct any mistakes within 30 days of receiving a legitimate dispute.
“Credit reports can contain mistakes, and lenders aren’t quick to point this out,” says Cowper. “You can request corrections directly with credit reporting bodies, and they must investigate.”
Removing incorrect default listings can lead to significant score improvements.
“I’ve seen clients’ scores jump by over 100 points after removing just one incorrectly listed default,” Cowper adds.
3. Buy Now Pay Later accounts still count as credit
Services like Afterpay, Zip, and Klarna might not feel like traditional credit, but they’re still tracked in your financial record. The Office of the Australian Information Commissioner (OAIC) confirms that BNPL services are treated as credit under the National Credit Code, meaning they can appear on your credit report and affect how lenders assess risk.
“Having multiple BNPL accounts open can make it difficult to manage repayments and may negatively impact future loan applications,” Cowper warns.
He recommends closing unused BNPL and credit card accounts to reduce total available credit and improve your profile.
“Lenders look at your total available credit, not just what you’re using,” he says. “Closing accounts you no longer need can make you appear less risky.”
Practical steps for improving your financial position
If you’re struggling with repayments, Cowper encourages proactive communication and support.
“If you’re facing financial stress, contact your credit providers early to discuss hardship provisions,” he advises. “Financial hardship information is now reported against your repayment history, so taking action early can protect your record.”
Australians can also access free financial counselling through the National Debt Helpline or local community legal centres.
Finally, Cowper recommends checking your credit report regularly, which you can do for free every three months through major credit reporting bodies such as Equifax, Experian, or illion.
“Understanding what’s on your credit report puts you in a stronger position when applying for loans,” Cowper says. “Knowledge truly is power when it comes to managing your credit profile.”
