A large portion of your credit score is determined by your credit history. This is why it’s advisable for borrowers to build a good credit history for a higher credit score or to appear more creditworthy when applying for a loan.

Lenders do a credit history check to ensure that you’re a responsible borrower and have healthy spending habits. If you have a history of late payments or have defaulted on a loan, your application may raise alarm bells. 

If you’re worried about your credit score, here are some ways you can maintain a good credit history: 

Always pay your bills on time

Paying bills late (or not paying them at all) can do a lot of damage to your credit history. Usually, after 30 days of no payment, a credit bureau marks the late payment on your credit report. 

If you tend to forget about your bills, set reminders on your phone or through an app to alert you when they’re almost due. Or you can talk to your bank and set up automatic payment so you’re never past due on any bills. 

Apply for loans only when necessary

Every time you apply for a loan, there will be a hard inquiry on your credit file. If you’re applying for a pre-approved loan, the lender will perform a soft enquiry which will also be recorded on your credit file. 

Making several loan applications within a short period could adversely impact your chances of approval. Lenders may see your application as risky because you’ve applied for too many lines of credit. Hard enquiries on your credit file also cause your credit score to dip a few points. 

If you want to open new lines of credit, do your homework and find a suitable lender first. Avoid applying to more than one place at a time as it can raise red flags when lenders review your credit history. 

Make sure your contact details are updated

Contact your credit providers immediately when you change your contact details. This includes your phone number, email address, home address, and the like.  

If you move and forget to update your address, for example, lenders may have a hard time reaching you. Debt collectors may be involved if credit providers have difficulty contacting you which could negatively impact your credit history. 

Check your credit history

Request a credit report and review your credit history yourself. Confirm that all the information in your report is correct and up to date. This also helps ensure that all the entries on your report are correct.  

If you find any errors, contact the credit bureau and have them corrected. Don’t hesitate to raise any issues or concerns regarding incorrect information on your credit report. You may be surprised at how much it’s affecting your overall credit score. 

Maintain current lines of credit

If you have old credit cards, think twice about closing them. Of course, this only refers to credit cards that aren’t hindering you financially. A lot of borrowers are under the impression that the less credit they have, the better their credit score is. But that’s not always the case.  

Having an extensive credit history can be helpful as it takes five to seven years to establish a good credit history. So, if you have lines of credit with no outstanding balance and a good track record, it may be best to keep them up and running. 

Is your credit history enough to get a good car loan?

A good credit history can make it easier to get car loan approval. But if you want to get the best deal possible on your loan, get in touch with Aussie Car Loans. We have access to a network of trusted lenders so you can find the ideal loan quickly. 

Even if your credit history isn’t stellar, we can help you find a bad credit finance that suits your situation. Contact our broker specialists on 1300 889 669 or apply online to get things moving today! 


What is a good credit history? 

A borrower with a good credit history usually has a credit score of around 700 or more. A good credit history consists of timely bill and debt payments, no recent reports of bankruptcies, and the like. 

What is a bad credit history? 

A person is considered to have a bad credit history if they consistently don’t pay their bills on time, have multiple hard enquiries on their report in a short period, and continuously max out their credit limit without paying off their debt. 

Is two years of credit history good? 

A credit history of two years is adequate, although it’s generally better to have a longer history. Having a credit history of shorter than two years may be considered inadequate by some lenders. 

Can I recover from having a bad credit history? 

Yes, you can recover from a bad credit history by paying your bills on time, paying off any outstanding debts, and making responsible financial choices. Bad hits on your credit history don’t last forever. Negative records on your credit history could last one to seven years depending on the severity. 

Why is credit history important? 

Your credit history helps lenders determine your creditworthiness. It helps them assess how much risk they will take if they approve your loan application.  

How do I build a good credit history? 

Build a good credit history by making timely payments on your utilities, rent, mortgage, credit card, and other debt. Also, avoid applying for too many loans in a short period as it can decrease your credit score significantly. 

Can credit history be cleared? 

Your credit history cannot be totally wiped clean. If there are any errors on your credit report, they can be removed and corrected. Defaults, late payments, financial hardship, and bankruptcy, could stay on your record for a few years. 

How long is credit history kept? 

Credit history can be kept from two to ten years depending on the credit bureau.  

Feature image by Frankie Leon on Flickr.