At Credit Savvy, we hear a lot of misconceptions about credit scores. It’s time to finally set the record straight. Here are 4 credit score myths busted!

  1. I’m a millionaire, my credit score should be perfect

Your credit score is based on the information in your credit file and unfortunately, your income, investments and assets are not recorded as part of your credit file. Having a great credit score isn’t about how much money you have, it’s about how good you are at handling credit.

  1. I’ve paid off my loan so it shouldn’t affect my credit score anymore

Not quite. An enquiry will stay on your credit file for 5 years. It will remain on your file regardless of whether your application is approved or rejected and does not indicate if the product was ever taken out, is still active or whether it has been paid off or not.

  1. All my bill repayments are being reported to the credit reporting bodies

Sending your repayment history to the credit reporting bodies is optional for lenders and some have only just begun to do this. So we’re still in a transition period and it will take some time for all your bill repayments to start filtering through to your credit file.

Further to this, only providers with an Australian Credit Licence can record your repayment history on your credit file. So, paying your phone and electricity bills won’t be counted on your credit report.

  1. A bankruptcy will affect my credit score forever

Nope. A bankruptcy may be listed on your credit file for whichever of the following periods ends later:

5 years beginning the day on which you become bankrupt; or

2 years beginning the day your bankruptcy ends

Once the bankruptcy is removed from your credit file, it will no longer affect your credit score.


Have you heard of any other credit myths? Share them with us in the comments below.



  1. Mehmet Kamil Reply

    Hi. Please help me. I first ever applied for a credit card January of this year I got declined. From frustration I kept on applying to other banks all up around 8, but yet to get declined over & over. I didn’t understand why this was happening as I never had a bad credit history or any defaults so I questioned one of the banks as to why I was being declined and they advised me to contact VEDA. Found out I had a default on my record and got a lawyer to take it to court because it was not my wrong doing. Successfully the notice was set aside and removed off my credit file. I recently applied for a Citibank credit card and got declined due to my credit history. I feel that all the previous applications I made from frustration has affected my credit history and I beg for help. Can somebody please help or guide me as to what to do. Also what is best and quickest way to improve my credit score? And finally how many points does credit score increase by roughly if everything is paid on time and so forth.
    Thank You

    • Credit Savvy Reply

      Hi Mehmet,

      Thanks for getting in touch, we’re really sorry to hear about your situation. As you have now discovered, a credit provider may record an enquiry on your credit file when you apply for a credit product regardless of whether your application was approved or rejected. How enquiries affect your credit score depends on the frequency and recentness of the enquiries, the type of credit applied for and the provider of the credit.

      There are many ways you can improve your credit score, but it takes time and generally requires you to maintain a healthy credit history. You have taken a good first step by getting the incorrect default removed from your credit report. Below are a few actions you can take that may improve your credit score:
      • Demonstrate financial responsibility by making all your repayments on time
      • Make an honest assessment of your finances and only borrow what you can afford to pay back
      • Limit the number of credit applications you make by researching the credit products available in the market and only select those that suit your requirements
      • Before applying, consider what type of credit you are applying for, who the credit provider is and the impact this could have on your credit score. For example, payday lenders may be viewed less favourably than banks.
      • Actively monitor and check your credit file for errors

      For further information, you might like to read our article: How to improve your credit score. There are lots of other articles and resources to help you understand credit in our Credit Knowledge Centre.

      Kind regards,
      The Credit Savvy Team

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