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Personal Loans Australia
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Personal Loans Australia :: Articles

5 Credit Killers

What are the top factors that can damage your credit score?

5 Credit Killers

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

A good credit score speaks volumes about your financial habits. It's the evidence most creditors need to evaluate your credit worthiness.
Interestingly, there are some credit killers that even people maintaining good credit scores would unwittingly be a part of, which will be their undoing when applying for credit facilities in the future.
These mistakes may seem to be insignificant, but when the time comes, you may face more problems than you expect.

Avoiding Debt

Creditors need to evaluate your financial history to approve any credit facilities.
If you have no previous or existing debts, it might adversely affect your case, as creditors have no way of checking out how you'll handle the credit you get from them.

Shopping For Rates

Looking around for the best rate may actually turn out to be bad.
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Too many inquiries within a short period could damage your credit score.
Usually, if you do more than 3 or 4 inquiries within a single month, you are likely to scare the lenders. For the same reasons, transferring the balances on your credit cards could be a bad idea as well.

Assuming There's a Grace Period

If you are late on a payment by even one day, you are late, period.
Never assume there's a grace period for late payments, because it only affects your credit score negatively.

Closing Old Accounts

Because your relevant transaction history also gets erased when you close your old accounts, your credit history is shortened and it may lower your credit score.
If you want to close your old accounts, close everything except the oldest account, which will leave a longer history.

Co-signing Loans

The obvious problem here is that the primary borrower's mistakes will end up on your credit report as well.

Published: Sunday, 1st Aug 2021
Author: Paige Estritori


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Finance News

APRA's New Cap on High Debt-to-Income Home Loans: What Borrowers Need to Know
APRA's New Cap on High Debt-to-Income Home Loans: What Borrowers Need to Know
19 Dec 2025: Paige Estritori
The Australian Prudential Regulation Authority (APRA) has announced a significant policy change aimed at curbing potential risks in the housing market. Effective February 2026, APRA will implement a cap on high debt-to-income (DTI) home loans, limiting such loans to 20% of new home lending portfolios. This move is designed to address concerns over escalating property prices and accelerated credit growth. - read more
Afterpay Users Advised to Close Accounts for Mortgage Approval: A Closer Look
Afterpay Users Advised to Close Accounts for Mortgage Approval: A Closer Look
19 Dec 2025: Paige Estritori
Afterpay, a leading Australian buy-now-pay-later (BNPL) provider, has raised concerns over certain banking practices affecting its users. Reports indicate that some customers were advised to close their BNPL accounts to qualify for mortgages, only to be subsequently offered credit cards by the same financial institutions. - read more
Australia's Big Four Banks Shift Away from Mortgage Brokers: What It Means for Borrowers
Australia's Big Four Banks Shift Away from Mortgage Brokers: What It Means for Borrowers
19 Dec 2025: Paige Estritori
Australia's major banks—Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), Westpac, and ANZ—are undergoing a strategic shift by reducing their reliance on mortgage brokers. This move aims to protect profit margins in the face of low interest rates, rising operational costs, and intense competition in the home loan market. - read more
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