Every time you borrow money, get a credit card or pay your mobile-phone bill, the computers in three credit reference agencies whirr into action.


They keep our credit records and the firms use that data to give us a credit score, which is supposed to encapsulate all that information about borrowing and
bill-paying in a single number.

The bigger it is, the better and the more likely you are to get the best deals when you borrow money or take out a credit card.

But even with a good score you can still be turned down by a lender that will calculate its own and assess other factors.

The three credit reference agencies are Experian (experian.co.uk), Equifax (equifax.co.uk) and TransUnion (transunion.co.uk).

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You can see your credit record free. Your credit score is also free at Experian.

For Equifax go via ClearScore (clearscore.com), and for Trans-Union use Credit Monitor from moneysupermarket.com.

Improve your score

First, it’s vital to make sure you’re on the electoral register. Next, always pay bills on time. Credit cards, loans, mortgages and monthly mobile phone bills all count on your credit record. Some utility bills, broadband, TV and landline services are also included. A single late payment
reduces your score; if you miss one, it will plummet.

Going overdrawn or failing to pay bank charges also counts against you.

Never take out a payday loan, and avoid bills with flatmates in joint names as their record affects yours. Your score is reduced when you apply for credit – especially if you apply for several different products in a short space of time.

However, if you just get a quote or research without actually applying (called a soft search), lenders cannot see that on your record, though you can.

Finally, take out a credit card and use it to pay for just a few things you would buy anyway. Then set up a direct debit to pay it off in full each month – making sure, of course, that you have enough in your bank account to do that.

For more information visit moneysavingexpert.com and search “credit scores”.