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Published October 24, 2022
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Do Australian Credit Repair Services Actually Work?

So, your credit score needs some attention. But should you pay for a credit repair?

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Spending money to get your credit in check may seem like a paradox. Credit repair companies exist to help people with low or fair scores and get them out of the red. A below-average credit score will hinder your ability to make everyday financial decisions, and people with low scores also pay the highest interest rates and fees, which is another paradox. 

If you have a poor credit score, aim to get into the green as fast as you can and stay there. 

What is a credit repair?

A credit repair, as the name suggests, is the process of reducing negative marks on your score while simultaneously implementing healthy money management habits that boost it. 

To determine whether you should even consider a credit repair, refer to the scoring grading for your respective reporting agency. 

Below Average or Low Score0-4590-5491-299
Average, Fair or Room for Improvement460-660550-624300-499
Very Good or Great735-852700-799700-799

As a general guideline, a credit score under 500 is cause for concern. 

A standard credit repair company will review your report, offer advice on any red marks, and help create a plan to improve your score. They can’t remove or change any factually correct information in your credit report but, in some cases, these companies can negotiate on your behalf with credit providers. 

Just be wary of any company or individual who promises to wipe your credit history clean. The cumulation of past negative behaviours won’t disappear overnight. 

The cost of credit repair services 

Most professional credit repair services may charge monthly fees — around $30-$100 — in addition to an initial set-up fee, typically less than $100. One Australian provider, Credit Clean Australia, charges a standard flat fee just shy of $1,200, plus $600 per additional negative listing. Overall, you can expect to pay at least $1,000 for the service. 

Still, no matter what they charge, credit repair companies can’t guarantee results. This isn’t to say that these services aren’t valuable or that increasing your credit score isn’t important, which it is. What’s in question is sharing your sensitive financial information with a third party and paying for a service you can do yourself. 

MoneySmart warns consumers to be wary of companies that claim they can remove unfavourable items from your credit report because correct information cannot be removed. 

DIY credit repair

A credit repair service has a limited ability to actually impact your report or score — they can’t change or remove any factually correct information. So, if you’re hoping to erase a spotty payment history, applications for credit cards, or your overdue bill from four years ago, a credit repair service won’t be any help. 

Only time and better habits can change that negative information, and you don’t need an external company to do this. DIY credit repair might take longer, but it’ll be more rewarding once you reach your desired score. 

You’ll prove to yourself you can turn your poor credit standing around, which will have flow-on effects on other parts of your financial life. There’s no quick fix, just incremental improvements from good habits, which compound daily.

Think long-term and give yourself time to increase your credit score. Know which negative information is hurting your score and commit to improving your credit standing during the length of time that information stays on your report. 

FactorLength of time
Serious credit infringements.Seven years.
Bankruptcies and debt agreements.Two or five years, depending on the circumstances.
Court judgements, credit enquiries and defaults.Five years.
Current debt obligations and repayment history.Two years.
Financial hardship information.One year.

For example, if you’re planning to buy a house in the future, give yourself at least two years, preferably five, to get your credit in shape. You can’t put a price on the satisfaction you’ll feel when achieving an excellent credit score.  

Are credit repair companies worth it? 

If you can go through your credit report with a fine-tooth comb, check and communicate any errors and engage with your lenders, you can repair your score without hiring a company. With a below-average score, it’s worthwhile sourcing a credit report from each of the three major bureaus — Equifax, Experian and Illion — to check for errors, inaccuracies, and opportunities. 

The hard work comes from consistently paying debts and bills on time, limiting your reliance on available credit, and only spending what you have in the bank (not on a credit card). By doing this, you’ll experience the fulfilment of achieving it yourself, which will have a flow-on effect on the rest of your financial management.

The same rules apply whether you repair credit yourself or work with a company. If you decide to engage a company, do your due diligence to understand your obligations, what they’re promising, and terms and conditions (read the fine print). Learn about the company, research its track record with other people, and read recent Google reviews. 


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