"Bad credit" is a vague phrase doing a lot of work. It gets used for someone with one late phone bill and someone three years out of bankruptcy, and those are completely different applications.
If a lender has said no, or you are worried one will, the useful move is to find out exactly what is on your file rather than guess. Here is what lenders actually see, how long it stays there, and what genuinely improves your position.
Australia now has two main credit bureaus, not three
This changed recently and a lot of advice online has not caught up. illion is now part of Experian. The illion website redirects to Experian Australia, and ASIC's MoneySmart now states there are two main credit reporting bodies where there used to be three.
So the two that matter are Equifax and Experian. You can request a free copy of your credit report from both, and you should get both, because they do not always hold identical information.
What the scores actually mean
Both bureaus score on a 0 to 1200 range. Be careful with older articles quoting a 0 to 1000 Experian scale, because Experian's own site now says zero to 1200.
Experian publishes fixed bands:
- 800 to 1200: Excellent
- 700 to 799: Very good
- 500 to 699: Good
- 300 to 499: Fair
- 0 to 299: Low
Equifax works differently, and this trips up almost every "what is a good credit score" article you will read. Equifax groups scores into five bands (Below Average, Average, Good, Very Good, Excellent) but sets them as percentile ranges against the credit-active population, not fixed numeric cut-offs. Equifax says its scores are reviewed regularly and the algorithm adjusted for population and economic changes.
That means the exact numbers where each Equifax band starts and stops move over time. Any site quoting precise Equifax cut-offs is repeating a third-party figure, not an Equifax one. Treat your band as the signal, not the number.
How long things stay on your file
These periods are set by the Privacy Act, not by the lender or the bureau, and they run from a specific start date:
- Repayment history information: 2 years from the day each monthly payment was due
- Financial hardship information: 1 year from the day the payment was due
- Credit enquiries: 5 years from the day the enquiry was made
- Defaults: 5 years from the day the bureau collects the information
- Court judgments: 5 years from the day the judgment is made
- Serious credit infringements: 7 years from the day the bureau collects it
- Bankruptcy: 5 years from the day you became bankrupt, or 2 years from when it ends, whichever ends later
A couple of things worth flagging. Court judgments are five years, not the four you will see quoted on a lot of credit-repair sites. And paying a default does not remove it. The listing stays for its five years but is updated to show it as paid, which lenders do treat differently.
There is more detail on the default process specifically in getting a car loan with a default.
Claims you should never trust
This is the part worth reading twice, because the bad-credit finance space attracts advertising that is not just optimistic but against the rules.
ASIC's advertising guidance, RG 234, was updated in June 2026 and is explicit. An advertisement should not state or imply that a credit product is suitable for a class of consumers unless the provider has actually assessed suitability for those consumers. Terms like "guaranteed acceptance" and "pre-approved" are called out by name. So is promotional use of "no credit checks" and claims of instant approval.
ASIC's own published examples include a lender advertising that finance was "guaranteed" with "no application refused". ASIC's view was that the claims were either misleading, because responsible lending obligations would prevent unsuitable credit being provided, or accurate and therefore evidence of poor and potentially unlawful lending. A broker advertising a "100% success rate" drew the same concern.
So the practical list of things that should make you close the tab:
- Guaranteed approval, guaranteed acceptance, no application refused
- 100% approval rate or 100% success rate
- Pre-approved, before anyone has assessed anything
- No credit checks
- Any offer to "clean" your credit file or remove legitimate defaults
On that last one, ASIC has taken court action against a credit repair firm that claimed to remove negative listings without even checking whether the consumer had any, or whether they could be removed. Accurate listings generally cannot simply be deleted. Incorrect ones can be disputed for free, directly with the bureau.
Nobody can honestly promise you approval before assessing you. Anyone who does is telling you something useful about themselves.
What ASIC found when it looked at car loans
In June 2026 ASIC published REP 832, a review of more than 350,000 car loans across eight finance providers for loans written between March 2023 and March 2025. Two findings matter enormously if your credit is impaired, because impaired borrowers are the ones steered into the worst versions of these deals.
Fees are often stacked and large. ASIC found two establishment fees are typical: a lender establishment fee ranging from $299 to $995, plus a distributor establishment fee ranging from a flat $912 up to $2,500. In the worst case in the report, a borrower took a $49,162 loan that included $9,154 in establishment fees, roughly 18% of the loan.
Repossession does not clear the debt. Four lenders gave ASIC data on over 250 loans where cars had been repossessed. In nearly 90% of those cases the borrower still owed more than half the original loan amount after the car was gone. Two individual cases ended up owing more than the original loan.
As ASIC Commissioner Alan Kirkland put it, consumers should not lose their car and still be stuck with the bulk of their debt.
Default rates varied enormously between the eight lenders reviewed, from around 2% at the low end to 64% at one lender. That spread is the whole argument for caring which lender you end up with, rather than taking whoever says yes fastest.
Watch the add-on products
Related and still relevant: ASIC's landmark REP 492 review of add-on insurance sold through car dealers found that across three years, $1.6 billion in premiums returned just $144 million in claims, about nine cents in the dollar. Over the same period insurers paid $602.2 million in commissions to car dealers, more than four times what consumers received in claims, with some commissions as high as 79% of the premium.
The market has been under regulatory pressure since, but the lesson holds: products sold to you in the finance office at the point of signing deserve more scrutiny than they usually get, not less. If your credit is impaired you are more likely to be offered them.
What actually improves your position
None of this is quick, but all of it is real:
- Get both credit reports and read them. Free from Equifax and Experian. Errors are common and disputing them costs nothing
- Fix repayment history first. It only looks back two years, so it is the fastest-moving part of your file. Consistent on-time payments on everything, including phone and utilities, compound quickly
- Stop applying. Every enquiry sits on your file for five years, and a cluster of them in a short window reads as distress. This is the most common self-inflicted wound
- Pay down what you can and close credit cards you do not use, since limits count against your borrowing capacity whether you draw on them or not
- Save a deposit. Reducing the lender's exposure does more for a marginal application than almost anything else you control
- Consider the car. A common, easily resold vehicle is a better security asset than something specialised, and lenders price that in
- Get a soft eligibility check before applying so you find out where you stand without adding an enquiry
More detail on the score itself in how your credit score affects your car loan rate, and on the application in how to boost your car loan approval odds.
Where a broker helps, and where one does not
A broker cannot make a lender approve you and should never tell you otherwise. What a broker can do is know which lenders on a panel have appetite for your specific situation, so you apply once to somewhere plausible rather than five times to places that were never going to say yes. Given every one of those applications leaves a five-year mark, that matters.
Loanseekers works with a panel of more than 70 lenders, and checking your options does not affect your credit score. If you already have finance at a rate set when your credit was worse, refinancing with bad credit is worth a look too, because your file may have improved more than you think.
