Your personal credit score can significantly affect your ability to access finance — especially when your business is still growing, lacks trading history, or you're seeking unsecured or low-doc loans.

Here’s what you need to be aware of and the actions you should take:

Monitor Your Business and Personal Scores

Lenders Often Check Your Personal Credit Especially if you're a sole trader or using a personal guarantee for business finance, lenders will assess your personal credit file alongside your business profile.

Your Credit Score Affects Loan Terms

A strong personal score can improve your chances of approval and lead to better rates, higher limits, and more flexibility.

Business Activity Can Impact Your Personal Credit

If you're using personal loans, credit cards, or guarantees to support the business, any missed payments or overextensions can negatively affect your credit.

Multiple Credit Applications Can Lower Your Score

Each loan or credit enquiry (even if unsuccessful) gets recorded. Too many in a short period is a red flag for lenders.

Actions to Maintain or Improve Your Credit Score:

1. Separate Business and Personal Finances

• Open dedicated business bank accounts and credit facilities.
• Avoid using personal credit cards or loans for business expenses long-term.
• Apply for an ABN-registered business credit card (if eligible).

2. Pay Bills and Loans On Time – Every Time

• This is the biggest factor in your score.
• Set up direct debits or reminders for all personal and business-related repayments.

3. Check Your Credit Report Regularly

• You can access a free credit report once a year from:

o Equifax: www.mycreditfile.com.au
o Experian: www.experian.com.au
o illion: www.checkyourcredit.com.au

• Look for any errors or fraudulent activity and dispute them immediately.

4. Avoid Over-extending Credit

• Don’t max out credit cards or take on more debt than you can comfortably repay.
• Keep credit utilisation (how much of your limit you’re using) low.

5. Limit the Number of Credit Applications

• Avoid shopping around with multiple lenders at once. Instead, speak to a broker who can match you to the right lender and minimise unnecessary credit checks.

6. Maintain a Healthy Cash Flow

• Keep your business financially healthy to avoid drawing from personal funds.
• Consider using tools or apps that help you track cash flow, invoice promptly, and manage receivables.

7. Use a Finance Broker

• A broker can help you access finance without damaging your score by applying strategically.
• Especially valuable when financing multiple assets on a regular basis

Tip: If you’ve had to rely on Buy Now Pay Later (BNPL) for materials or used short-term loans, be aware these are often seen as risky behaviour by lenders. Prioritise paying these off quickly and consolidating debt if needed. 

What You Can Do to Repair Your Equifax Credit Score

1. Review Your Credit File For:

o Incorrect listings (wrong defaults, duplicate entries)
o Old debts that should’ve been cleared
o Unauthorised enquiries or identity fraud Dispute errors via the Equifax dispute portal — this can lift your score fast if successful.

2. Pay Off Outstanding Debts

• Prioritise:

o Defaults under $1500 — paying these still improves your file.
o Active credit card or loan arrears

• If you can't pay in full, set up formal payment arrangements and stick to them. Paid defaults don’t disappear immediately but are marked as paid, which lenders view more favourably.

3. Lower Your Credit Utilisation

• If your credit card limit is $10,000, try to stay under $3,000 (30%).
• Consider increasing your limit slightly or paying down the balance weekly to reduce the ratio.

4. Avoid New Credit Applications Unless Necessary

• Every application (even for a phone plan) leaves a credit enquiry that can lower your score temporarily.
• Use a finance broker if you need a loan — they can check multiple lenders without hitting your score repeatedly.

5. Make Every Repayment On Time

• Repayment history now makes up a large part of your Equifax score.
• Even 1–2 late payments can hurt.
• Set up direct debits or calendar reminders.

6. Consider a Low-Risk Credit Product to Rebuild

• A low-limit secured credit card or credit builder loan (offered by some fintechs) can help.
• Make small purchases and repay in full each month — this shows positive repayment behaviour.

7. Clean Up Old Accounts

• Close unused credit cards or store accounts (as long as it doesn’t max out your usage).
• Keep your oldest accounts open though — credit age helps your score.

How Long Will It Take to Recover? 

Late repayments: 1–3 months (if corrected quickly)
High utilisation: 1–2 months (after paying down balance)
Multiple credit enquiries: 6–12 months (each stays for 5 years but impact fades faster)
Paid default Score: may improve within 3–6 months
Disputed error removed: Up to 1 month after resolution
Bankruptcy: Up to 5 years to drop off (7 with some types)