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It can be quite distressing to discover that your application for credit has been knocked back. In fact, for most Australians the first time they know they actually have bad credit is when their bid to get something such as a credit card, cash loans or credit for betting on a hot horse racing tip is rejected.

Having a poor credit history, however, doesn’t mean your chances of borrowing have completely evaporated. There are ways you can repair your bad credit or turn your poor credit history around.

Check your credit record

Your credit history is checked every time you make an application for any type of credit. The credit provider buys your report from a credit agency and it goes a long way to determining whether you are a lending risk or not. Just like those providers, you can access your own credit report. In most instances a written report can be mailed to you for free (it can take around 10 working days to arrive) or you can pay for the privilege of instant online access (this can cost around $30 to $40). Do a search of the internet to find a credit agency that can help you through the process. Once you have your credit report, check it for errors. Sometimes just a small mistake can mean the difference between your applications being accepted and rejected. If you do find something is in error, take steps to rectify it by contacting the credit agency in writing.

Pay your bills automatically

Quite often it can be the fact that you simply forgot to pay your bills that is the problem. This shows up on your report, especially if companies have had to send debt collectors after you. It can be hard keeping on top of all of the bills, which always seem to need to be paid at different times of the month. An easy way to fix this is to set up direct debit from your bank account to pay your bills automatically. That way all you have to do is make sure the money is the account at the right time each billing cycle to cover the repayments. It’s a handy feature and it usually doesn’t cost any extra to set up.

Consider debt consolidation

If it is current debts that are proving to be a major hurdle, it can be a good idea to roll all of them into something more manageable. Debt consolidation is a good way to get your repayments under control and works by placing all of your requirements into one easy-to-manage loan. This will immediately eliminate the many debts you may have, leaving you with just one repayment to make. Work with an expert to find the right debt consolidation product that suits your individual circumstances.

Improve your track record

You may have some black marks against your name, but a record that shows an improvement in your credit history is going to be a big help when it comes to borrowing. If a lender can see that over a certain a period of time – say the last 12 to 24 months – you have had no credit problems, then they are likely to look more favourably upon your application. Of course, it can be hard to get credit when you have a bad credit history. But a debt consolidation loan or any other type of credit that you have been able to secure – and you have serviced properly – will go a long way to restoring confidence in your ability to repay what you borrow.