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Managing credit in tough times

Tough times can hit anyone at any time. The rising cost of living, increased mortgage repayments, or a major upheaval in life can all impact your budget and finances.

For personal well-being, it's important to try and stay on top of it all, and not let existing credit get out of control while trying to make ends meet. This might seem impossible, but by making a few changes and, most importantly, talking to lenders, there can be light at the end of the tunnel.

It all comes down to three key things:

  • Understanding your credit report
  • Managing payment difficulties
  • Seeking support

Understanding credit reporting

To get a handle on good credit management, it's handy to start with the basics - understanding your credit report.

In Australia, there are three organisations - Equifax, Experian and illion - who provide credit reports to potential lenders such as banks and other financial institutions and help them assess whether you can pay back the credit you are applying for.

These credit reports tell lenders:

  • How much credit you already have, such as loans and credit cards
  • How often you've applied for credit (including from other credit providers)
  • Your repayment history on current loans and credit cards over the last 24 months
  • Any repayments to lenders on loans or on credit cards that you have missed 

This is all important information, and so it's important to check your credit reports from each of the credit reporting bodies to make sure they're correct, and tell them if you see any inaccuracies

One of the most important sections in a credit report is your repayment history. It shows the last 24 months of repayments on loans and credit cards - including overdue and missed payments. These can be a red flag to potential lenders and can seriously impact your credit rating. That's why it's vital to stay on top of repayments, or to chat with your lender the moment you think you might miss a payment.

Managing payment difficulties

Wherever possible, try to make payments on time - even if it's just the minimum amount due.

Remember though, credit cards in particular can have high monthly interest rates, so if you can, it's always best to pay off as much as possible to prevent interest payments snowballing.

Unfortunately, life isn't always simple, and there may be times when, even with the best efforts, making the minimum payments is impossible.

If you think you'll miss a payment, get in touch with your lender right away!

Banks, credit card providers and other major lenders have experienced teams on hand to help out customers who are facing financial difficulties. And the sooner you get in touch with them, the sooner help may be available. They'll confidentially discuss your circumstances with you and may be able to offer a repayment plan or financial hardship assistance.

One very helpful option may be to enter into a financial hardship arrangement. This is a tailored plan agreed between you and your lender that may allow you to:


If you enter into a financial hardship agreement, a 'flag' appears on your credit repayment history for the next 12 months, but it does not lower your credit score. In fact, the law specifically prohibits it. Instead, it may actually improve your creditworthiness in the eyes of a potential lender as it indicates that you're being responsible and proactive about your financial circumstances.

It's important to note that lenders are not obliged to offer a hardship arrangement, especially if they feel that it will make a financial situation worse in the long run.

Plan ahead

If your fixed-rate home loan is coming to an end, and you're facing increased mortgage repayments, have a chat with your bank to see if you're getting the best rate or conditions possible. Also check with other lenders to see if you'd be better off refinancing with someone else.

Even if you're under a financial hardship arrangement, current or potential lenders may be able to offer more flexible conditions or better interest rates.

Seek support and help if needed

Life is much more than just a home or a car. Personal and emotional health is just as important as financial health. So, if you're feeling overwhelmed and worries are taking a toll on your mental well-being, don't be afraid to reach out for support - whether it's personal or financial.

You'll find some suggestions below, but they're not the only ones - even a trusted friend, doctor or mentor can be a good start to help figure out the best way forward.

  • The National Debt Helpline 1800 007 007 has financial counsellors who provide free expertise and can connect you with relevant financial support services.
  • Lifeline 13 11 44 and Beyond Blue 1300 22 4636 offer free, highly experienced mental health support - especially if financial stress is affecting your mental well-being
  • Ask Izzy is a free and anonymous website that connects people in need with housing, meals, money help, family violence support, counselling, and more.

More information

Take a look at our resources and FAQs containing everything you need to know about financial hardship and how to stay credit healthy.

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