What Happens If You Just Ignore Your Bad Credit?

Bad credit is like a splinter — the longer you leave it, the more painful and problematic it becomes. Many Australians avoid dealing with their credit reports because it feels overwhelming, shameful, or just not urgent. But ignoring your bad credit doesn’t make it go away — it makes your financial life harder, more expensive, and full of missed opportunities. 

Let’s break down exactly what happens when you ignore your bad credit — and what you can do about it before it costs you even more. 

1. You’ll Struggle to Get Approved for Finance

Whether it’s a car loan, home loan, or even a new phone plan, lenders will look at your credit report before giving you the green light. If you’ve got missed payments, defaults, or too many inquiries — expect a rejection. And if you do get approved, it’s usually with: 

• Higher interest rates 
• Stricter repayment terms 
• Larger upfront deposits 

This means borrowing is either out of reach or a lot more expensive than it needs to be. 

2. You Could Be Paying More for Everyday Bills

It’s not just banks checking your credit. Utility providers, mobile phone companies, and even rental agencies often look at your credit history. A poor score can result in: 

• Being asked to pay a security deposit
• Getting placed on a prepaid or restricted plan
• Losing out on competitive energy or internet rates

Bad credit quietly punishes you across multiple parts of life — even ones that don’t seem “financial” at first glance. 

3. It Can Hold You Back from Getting a Home

Many of our clients at Credit Repair Australia come to us after being declined for a home loan — often because of one or two black marks on their file they didn’t realise were still there. Lenders want clean, reliable credit behavior. A bad score can delay your dream of home ownership by months or even years, especially in today’s tighter lending environment. 

4. The Stress Adds Up Over Time

Financial stress doesn’t just sit quietly in the background — it affects your sleep, your mood, your relationships, and your confidence. Ignoring your credit file means living with that constant uncertainty: 

• “What if I need to apply for a loan later?” 
• “What if I get declined for something important?” 
• “What else is sitting on my report that I don’t know about?” 

The mental load adds up — but clarity can change that quickly. 

5. Your Debts Could Escalate

If your bad credit is due to unpaid or mishandled debts, ignoring them doesn’t make them disappear. In fact: 

• Debt collectors may take over, which impacts your credit even further 
• Legal action could be taken (including court judgments) 
• Additional fees and interest may be added, blowing out what you owe 

Taking early action can reduce damage, protect your options, and save you thousands. 

6. You Miss the Chance to Repair It

This is the biggest opportunity cost: doing nothing means you stay stuck. But did you know that many credit report issues can be removed or corrected?

• You might not be liable for the debt at all 
• The creditor may not have followed proper procedures 
• Some listings may already be eligible for removal 

But you won’t know unless you look — or unless you have someone experienced look for you. 

How Credit Repair Australia Can Help 

At Credit Repair Australia, we help Australians clean up their credit reports, eliminate unverified or incorrect listings, and give them the confidence to apply for finance again. 

When you work with us, we: 

• Review your credit reports from all three bureaus 
• Identify the items we can challenge or remove 
• Handle the negotiation and removal process for you 
• Provide a clear, step-by-step plan to get your credit report back on track 

Even if you’re not ready to apply for a loan yet, fixing your credit early gives you freedom and flexibility when you are. 

Gavin Symes MBA, Dip FS (FP)

Gavin holds an MBA and a Diploma in Financial Services (Financial Planning). He has been a driving force behind the growth of Credit Repair Australia since its inception in 2003.