Financial stress has been causing discomfort among many Australian households and a new study showed that in the event of an economic downturn, millions mired in debt would be buried deeper before overcoming their credit dues.

According to credit reporting agency Veda, roughly 2.7 million Australians were currently dealing with pressing debt repayments and about 750,000 of them would likely accumulate more debts to meet their financial obligations.

Veda's Thursday report also painted a grim picture for Aussies who are hard pressed to make both ends meet as big portions of their income were being gobbled up by debt repayment - a scenario that Veda researchers said could push them down further into what it termed as 'debt spiral'.

Of the 1,052 interviewed in the survey, which Veda said was conducted in March, only 57 per cent had expressed optimism that their present salary level would be able to finance their credit dues, a decline from the 64 per cent recorded by the agency in March 2009.

To face up their creditors, the bi-annual Australian Debt Study from Veda showed that 25 per cent of Australians were inclined to raise the level of their credit limit or other personal loans, with about 66 per cent willing to tap their savings or dispose off some assets for debt repayments.

It appears too that under the present circumstances, 40 per cent of the respondents consider their financial status as undergoing considerable stress while another 20 per cent admitted that making payments for the next due represent the likelihood of a default.

Veda spokesman Matthew Strassberg said on Thursday that the new data only underscored the need to revise the credit reporting laws, which he stressed on their present form "do not show a person's credit limit, or if they are failing to make the minimum payment on their credit cards or loans."

"It makes it easier for someone already in trouble to get yet more credit - pushing further into a downward debt spiral," Mr Strassberg said in a statement that accompanied the Veda report.

What the Veda data presented was somewhat frightening, according to Consumer Action Law Centre Director Gerard Brody, as they pointed to a trend that households resort to moves that tend to trap them deeper on piles of debt instead of devising ways that could lessen their financial burdens.

"Applying for more and more debt is not the answer and some of these credit products can lead people to be worse off financially," Mr Brody told The Herald Sun on Friday.

The new report also established that households in Victoria and West Australia were among those likely to manage their financial issues quite well while those in New South Wales, Queensland and South Australia were deemed less likely to face the problem squarely.

Also, only a handful of those interviewed by Veda researchers expressed willingness to seek professional help but the numbers increased when those asked were within the moderate-income brackets or those regarded as white-collar employees.