If you’ve found yourself in over your head with your finances and have ended up with a bad credit score, we know it can feel overwhelming. Applying for a personal loan or even just getting ahead could seem out of reach. But don't worry, we’ve got you covered. At Instant Finance, we understand that having a low credit score can be a real pain. That’s why we're here to give you some tips on how to increase your credit score in NZ without all the jargon and fancy language.

In this blog, we'll chat all about tips and the most asked questions, including:

  • Does Afterpay affect your credit in NZ?
  • Does credit card debt affect your credit score?
  • How do you build up your credit?


Understanding your credit score and credit report

Before we dive into how to increase your credit score in NZ, it's important to understand your credit score, how it works, and why it's important in a personal loan application.

Your credit score is a number that represents your creditworthiness based on your credit history (i.e., how good you are at managing your money and repaying debts). In New Zealand, credit scores range from 0 to 1,000. A high score means that lenders and loan providers may see you as a more reliable borrower, and you may have better chances of being approved for things such as a personal loan. If you have a low credit score, it can be harder to borrow money, which means you may be declined for a personal loan or credit card. This may also mean you will have to pay a higher interest rate as it's more risky for loan providers to lend money to you.

At Instant Finance, we look at a range of factors when assessing a loan application, not just your credit score, which helps us paint a picture of your full financial position before making a decision. What this means is that if you do have a bad credit score or have defaulted on payments in the past, it's not all over. You can read more about getting personal loans with bad credit here (*link*), and you can also read more about of application process and eligibility criteria here (*link*)


Does Afterpay affect your credit in NZ?

Many of us will have heard of Afterpay and other Buy Now Pay Later providers or even made use of them – it's a popular way to buy now and pay later for goods. But here's the big question: does Afterpay affect your credit in NZ? The good news is, nope! Using Afterpay won't affect your credit score at all.

Afterpay is not a credit product, meaning it won't show up on your credit report or affect your credit score. That being said, there's one thing to watch out for – if you miss a payment for 7 days or more, Afterpay will alert Centrix, the New Zealand credit bureau, which will leave a record in your credit file but will not affect your credit score.

Read more on: Is using Afterpay bad for my credit score?


Does credit card debt affect your credit score?

Unfortunately, the answer to this is yes – having a lot of credit card debt can bring down your credit score.

Essentially, when you have a lot of debt on your credit cards, it can make your credit utilisation high. A credit utilisation rate basically looks at how much of the credit you have available to you that you are currently using. So, if you have a lot of cards or loans, all near or at their maximum limit, this will mean you have a high rate.

Read more about credit utilisation rates: What is a Credit Utilization Ratio?

A high utilisation rate signals that you may be having trouble managing your finances. If you have a credit card, paying your bill on time and in full is key to avoiding accruing interest and damaging your credit score.

But hey, we get it – sometimes life happens, and you end up with more credit card debt or a lower credit score than you'd like. If that's the case for you, don't worry! There are a few things you can do to help pay down your debt and get your credit score back on track.


So, how do you build up your credit score?

The good news is that it's never too late to start building up your credit score, but it does take time and effort. A good score can be valuable, not just when applying for a personal loan, but also for things like insurance, renting a property or even applying for some jobs and new phone contracts.

Tip 1: Know your credit score and check your details on the credit report.

Knowledge is power! If you don't know your credit score, you can't work to improve it. You can obtain a free copy of your credit report (with your credit score and loan records) once a year from each of the three credit reporting agencies in NZ:

  • Centrix (allow 1 working day for a free report if you submit with a current NZ driver's license or NZ passport and allow 5-10 working days if you supply another form of ID)
  • Equifax (allow 10 working days)
  • Illion (allow 10-20 working days)
  • Yonda | Your free credit score

Once you receive your report, review it carefully and keep an eye out for any errors, such as incorrect account information, incorrect balances, credit history, or accounts you don't recognise. If you find any, you can dispute them with the NZ credit bureau to have them corrected.

Tip 2: Aim to pay your bills on time.

Your payment history is one of the most important factors in determining your credit score. Do your best to pay your bills on time, whether it's your credit card, power bill, or loan payments. If you do end up with any outstanding bills or fees, contact your provider as soon as possible to put an arrangement in place. The worst thing you can do is ignore them and do nothing!

Late or overdue payments can stay on your credit report for up to seven years and negatively impact your credit score. So, stay organised and stay on top of your bills.

Here's a hot tip – setting up automatic payments or reminders on your calendar can be a lifesaver. That way, you won't have to worry about forgetting a due date and keep track of your spending.

If you're finding it hard to keep track of your debt repayments, combine your debts into a debt consolidation loan with one repayment and a fixed interest rate. This way, you can manage one repayment and work towards a healthy payment history and credit score.

If you'd like to find out more about how we could help you with a debt consolidation loan, please don't hesitate to contact our friendly team or visit one of our local branches.

Tip 3: Keep your credit utilisation low if possible.

If you have a credit card, it's essential to keep an eye on how much credit you're using compared to how much you have available. This is called your credit utilisation ratio. Ideally, it would be best to aim to keep this ratio below 30%.

For example, if you have a limit of $1,000 on your credit card, try not to use more than $300 of it. If you can, it's best to pay off your credit card balance in full or as much as possible each month. By doing so, you can keep your credit utilisation ratio low and work towards a healthy credit score.

Tip 4: Avoid applying for too many new credits.

It's important to remember that every time you apply for credit, the lender will conduct an inquiry on your credit report, which can affect your credit score. It's a good idea to research which loan type or personal loan provider you'd like to choose before applying and triggering a credit check.

Tip 5: Do retain some borrowing.

Having a good level of borrowing will allow you to build a positive repayment history if you ensure you always meet all your obligations and on time. Potential lenders will review your payment history to verify that you are a responsible borrower, so it's important you have some current payment activity.


It's never too late to start building up your credit score. The key is to stay active with your credit accounts and make regular, on-time payments and if you can't, contact them straight away. This shows lenders that you're reliable and responsible when it comes to managing credit.

At Instant Finance, we believe everyone deserves a chance to remedy their financial situation, even if they have bad credit. If you're looking for a car loan, travel loan or any other type of personal loan, we can help you make it possible. Apply for a personal loan online today or visit your local branch to learn more about how we can help.

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