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The more up-to-date your credit rating is, the more likely you’ll be to gain the credit you apply for.”

Improving your credit score is a relatively easy way to keep your financial profile up to date. When you apply for a credit card, lenders check with credit reference agencies such as Experian, Equifax or Callcredit. They use what is known as a credit scoring system to decide whether to lend to customers and at what interest rate.

The more up to date your credit ratings are, the more likely you’ll be to gain the credit you apply for.

Practical steps towards a healthy credit score

• It is essential that you register on the electoral roll for your current address. If you are not on the roll you’ll find it very difficult to get any credit. If you aren’t eligible to vote you can send credit reference agencies proof of residency.

• Missing just one or two repayments can have an adverse effect on your credit scoring. To ensure your repayments are made in time put them on direct debit and pay at least the minimum back or more if you can, to build up a good payment history.

• Present a stable financial profile. If you are a homeowner you will score more highly. Higher scores will also apply if you are employed rather than self employed. A landline number rather than a mobile number also works in your favour. If you have been with the same employer, bank and/or at the same address for a number of years these all count for a higher score.

• If you are refused credit don’t carry on searching for credit anywhere else because each search leaves ‘footprints’ on your record and can damage your chances of obtaining credit. In this case get a copy of your credit rating and then start improving your profile.

• Close cards and accounts that you no longer use as lenders look at all of your available credit even if you are not using it.

• Smooth out any glitches in your past financial history. For instance if you have paid a county court judgment make sure the settlement is recorded on your credit file. If you have any past arrears get these paid off.

• If you have any savings don’t hang on to them. Instead use them to pay as much of your balance off as possible. This will free your cash flow and help your credit rating as lenders see your debt decrease.

• If you are a couple and one of you has a bad credit rating don’t link financial products. This might be easier said than done if you need to have a joint mortgage but joint finances mean that you will be co-scored. If it is possible to keep finances separate then one partner will have access to good credit.

• Be wary of credit repair companies. They offer advice and charge a fee but this is information that can be obtained from the credit reference agency itself and even debt counselling services.

• If you don’t use credit you may not have a good credit rating. This might sound confusing but there is no way for the reference agency to understand your lending patterns without any previous history. In this case take out a credit card and use it wisely to build up a profile.

• Make your mobile phone work for you. When you take out a contract with a mobile phone company you are signing up to a consumer credit contract. If you keep up with monthly repayments this will help your credit rating.

• If your credit rating is low you may still be able to get a mortgage even if you have to pay higher rates of interest. By keeping up with repayments for the life of the mortgage arrangement, you may be able to take advantage of a better deal when it comes to re-mortgaging.

More information from National Debtline: 0808 808 4000