One person in three has been told “no” when asking for credit, but a bad credit score can affect much more than just getting a loan.

What's even worse is that 15 million Brits never so much as glanced at their credit report – the tool lenders use when deciding whether or not to hand money to you.

But it's not just lenders. Landlords, potential employers, mobile phone companies, insurers, energy companies and more all look at your credit report before deciding to accept or refuse you.

A bad credit score can cause an awful lot of problems, so this is everything you need to know to boost your credit score and improve your chances of getting accepted for whatever you apply for.

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What is a credit score?

Credit scores record of all your borrowing, current accounts and a lot of other financial and public record information about you – including where you live, if you're registered to vote and more – and assign you a number - your "score" based on it.

These are used by others to check how reliable you are before dealing with you.

There are three main providers of credit reports – Experian, Equifax and CallCredit.

What you are scored on

Your credit score is based on:

  • Personal details about you – ie your name and address

  • Details about all your credit accounts – that is to say bank accounts, credit cards, utility bills, phone accounts, store cards and mortgages.

  • Payment status – ie do you pay your bills on time

  • History of paying things back – ie have you missed payments in the past

  • Your outstanding balance – how much you have borrowed in total, by type (ie how much overdraft, how much on cards, how much on loans etc)

  • How much spare credit do you have – ie you have a £1,000 credit card limit , but are only £50 into it

  • How long have you had these accounts – the longer, the better your score in many cases

  • How often you're asking for new accounts – if you've just applied for 20 new credit cards, that will show up to anyone looking at the report

  • Are you on the electoral roll

  • Have you had any CCJs, IVAs or been declared bankrupt in the past 6 years

  • Do you have debts at a previous address

  • Have you been a victim of ID theft

  • How many addresses are you linked to – ie do you have credit accounts where the payment address is not current, or different from your main address

  • Past names

  • Financial associates – these are people you are linked to through joint accounts

Who checks your credit score and when?

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An awful lot of people check your credit score – it's not that expensive to do and is a quick way to find out how reliable/responsible you are.

People who are known to check them include:

  • Credit providers – everyone from banks to payday loan providers and mortgage lenders check your report before lending to you (or saying “no”).

  • Mobile phone providers

  • Landlords

  • Employers

  • Insurers

  • Energy providers

  • Broadband providers

How do you check your own credit score

You can check your credit score with any of the main providers for free.

Experian and Equifax give you access for 30 days free – which lets you check for errors and see what's on there.

However, make sure you DO cancel, or you could end up paying £14.95 a month for a service that you don't use.

CallCredit, through the Noddle service – offers you free access to your credit report for life .

You also have a statutory right to see your credit score, which costs £2 to get hold of and is posted to you.

How to correct errors on your credit report

If you see something on your credit report that is incorrect or incomplete, contact the provider.

It's in their interest to make sure they have the most accurate information, so they will contact the provider themselves to chase up for you.

A note will appear on your credit report, where you can explain what's going on while the error is being investigated.

If the provider recognises the error, the report will be changed to reflect that and the update sent on to any other credit report providers they use.

If there is a dispute, you can add a notice of correction to your report to explain your side of events. Lenders have to read these before they make a decision about whether to lend to you or not.

You can contact the main agencies using the links below:

How to improve your credit score

The best way to have a good credit score is to be a long-term customer of a few credit accounts, paying money back on time for a good period and being well within your credit limits. Having a stable address helps too.

Of course, you can't do that overnight. So what can you do to boost your score in the short term?

Firstly, it's impossible to have an “excellent” rating unless you're registered to vote at your current address. So do that now.

Secondly, check your report for any errors or out of date items. Something could be holding you back unnecessarily.

Thirdly, close any unused accounts. There's no point having them if you don't use them, and if you've got old ones, it can impact your “available credit” number – which might spook future lenders.

Fourthly, open some accounts. If you've never had a credit card, taken out a loan and don't have an overdraft, you'll struggle to prove you're responsible as there's no evidence of you paying back debt.

Opening a credit card for bad credit, using it, then repaying it in full each month – even for small amounts – can help.

Oh, and don't apply for lots of things in a short space of time – lenders can get worried by this and it can make you look desperate for credit.

Applications stay on your report for six months, so if you've been turned down, wait that long before applying again - and possibly use a tool to work out how likely you are to be accepted for a card before applying for it (and potentially being rejected).