Your credit score plays a major role in shaping your financial opportunities—from securing a home loan to getting approved for a credit card. Yet, for many Australians, this three-digit number is often misunderstood. Misconceptions about what affects a credit score or how it limits financial options can lead to unnecessary stress and missed opportunities. Even those with less-than-perfect scores can still access financial products like low credit score loans designed to help rebuild credit and regain financial stability.

Below, we’ll debunk some of the most common myths surrounding low credit scores and explain what’s really going on behind the numbers.

Myth 1: A Low Credit Score Means You Can’t Get a Loan

Many people assume that a low credit score automatically disqualifies them from borrowing money. While it’s true that lenders assess creditworthiness before approving applications, having a low score doesn’t mean the door is closed. There are lenders in Australia who specialise in supporting people with imperfect credit histories. These providers evaluate other factors—such as your income, employment stability, and ability to make repayments—when assessing eligibility. Products like low credit score loans are designed to give people a fair chance at rebuilding their financial reputation while still meeting their immediate needs.

Myth 2: Checking Your Own Credit Report Lowers Your Score

Another common misconception is that viewing your own credit report harms your credit rating. This isn’t true. When you check your credit report, it’s considered a “soft enquiry” and has no impact on your score. However, multiple “hard enquiries”—for example, when you apply for several loans or credit cards in a short period—can temporarily affect your score. Regularly reviewing your own report is actually a smart habit, helping you stay aware of changes and detect potential errors or fraudulent activity early.

Myth 3: Once You Have Bad Credit, You’re Stuck with It Forever

A low credit score isn’t permanent. Your score changes over time based on your financial behaviour. By paying bills on time, reducing outstanding debts, and avoiding unnecessary credit applications, you can steadily improve your score. Even small positive actions—like setting up direct debits or maintaining a healthy mix of credit types—can make a difference over time.

Myth 4: Closing Old Credit Accounts Helps Your Score

It might seem logical that closing old credit cards would improve your score, but that’s not always the case. Long-standing accounts with a positive payment history can actually strengthen your credit profile. When you close these accounts, you may reduce your overall credit limit and shorten your credit history, both of which can negatively affect your score.

Myth 5: Your Income Directly Determines Your Credit Score

While your income influences how much you can borrow, it doesn’t directly impact your credit score. The score is based on your financial behaviour—specifically, how reliably you’ve managed past debts and credit obligations. That said, maintaining steady income and employment can still improve your chances of loan approval, even with a lower score.

Understanding your credit score—and the myths surrounding it—is key to taking control of your financial future

A low score doesn’t define your financial potential; it’s simply a reflection of your past credit activity and can always improve with time and discipline. If you’re working to rebuild your credit or need financial assistance now, exploring options like low credit score loans could help you take positive steps toward a stronger financial position. The key is to stay informed, make consistent repayments, and manage your finances with confidence and awareness.