As well as listing your credit accounts and showing whether you make repayments on time and in full, your credit report contains a range of information that helps lenders assess whether you are a reliable borrower and can afford to take out more credit. This data includes details of any court judgments against you for non-payment of debts, plus bankruptcies or individual voluntary arrangements you've taken out.

Only YOU can view your credit report. Lenders are allowed access to check your credit history but only when you've given them consent. You have a statutory right to see your credit report.

The electoral roll shows if you have registered as a voter at your current address. Lenders check the roll as a precaution against fraud, to make sure that you live where you say you do.

Your financial associates are also listed - these are people with whom you share a joint account, such as a credit card or mortgage. Their credit report details don't appear in your report, but lenders may look them up separately because their circumstances could affect your ability to repay what you owe.

This information comes from major sources including public records, such as court records, and the electoral roll. The rest is contributed by lenders (remember that lenders will tend to share negative information, such as missed repayments). If you have committed fraud, or someone has committed fraud against you, these will be listed in the CIFAS section.

Lenders use credit reports to assess whether potential borrowers are reliable, stable and do not already owe more than they can comfortably repay. To calculate the chances that you'll make your repayments, they take the information in your application form and credit report and allocate each item a value. They then use a unique formula to calculate a credit score. Generally, the higher your score, the easier you'll find it to borrow.

You don't have a single credit score because every lender uses a slightly different formula in their calculations. Some even use different formulae for different products, so you could get different decisions if you apply to the same lender for a car loan and a store card.

Your credit score also changes over time as your circumstances change. For example, paying off a loan could improve your score, while missing a couple of repayments could cause it to fall.

Monitoring your credit report also provides valuable protection against identity fraud - one of the fastest-growing crimes of the 21^st century. Because your credit report contains a record of your credit accounts and tracks the applications you make, you can easily spot unfamiliar entries or credit account searches that could indicate an attempt to borrow money in your name. That allows you to stop problems before they have a chance to develop.

If you are refused or declined credit, you are entitled to know the reason, as well as the name of the agency that provided your credit reference.

9 steps to improve your credit rating

1. Check your credit file

Before you apply for any type of credit, check your credit report. You can view this on a free trial basis or by paying a small fee. Make sure that all the information on the report is accurate, and get it removed by contacting the lender if it isn't. If you request your report on a free trial, and you don't need access to it after the trial period ends, remember to cancel it by setting a calendar reminder.

2. Disassociate yourself from your financial partner

When you take out a joint mortgage or joint bank account, you become "financially linked" to the person you've taken it out with. If they have a bad credit rating, it could impact yours. If you have split up with your partner, husband or wife and/or the joint financial product you have taken out is no longer between you both, inform the credit reference agencies of your disassociation. If not, the other person's financial dealings could still have an impact on your credit score.

3. Get on the electoral roll

Getting on the electoral roll will improve your chances of being accepted for credit. This is because prospective lenders and credit reference agencies use this to check you are who you say you are, and you live where you say you live. Ensure your credit record shows correct address details. Living at the same address, being employed in the same job (with the same employer) and having the same bank account for a reasonable period of time will also help.

4. Close unused credit cards, store cards, direct debits and mobile contracts

Lenders may consider the amount of credit you have access to, as well as the amount of debt you owe. Close all credit accounts such as credit cards, store cards, mobile contracts and accounts that you don't use or need anymore. Cutting up cards is not enough – you need to physically contact the provider and close the account! They will ask you why because they don't want you to leave, so be prepared to stick to your guns and close it down.

5. Don't miss or make late repayments

Missed and late payments can stay on your credit file for up to six years. If you've made a late payment due to circumstances beyond your control (i.e. your direct debit wasn't set up in time), so long as you made the payment promptly when you noticed, talk to your credit provider and see if you can get this black mark removed. This also applies to late payments for utility bills like gas or electricity.

6. Pay off your debts

Pay off more than just the minimum payment. This signifies good behaviour to a prospective lender. To be seen as managing your debt well, ensure that you're making headway into repaying what you've borrowed.

7. Build your credit history with a credit card

If you've never had credit before, it's difficult for a lender to assess you. Consider taking out a credit building credit card, making a couple of purchases on it each month and then repaying the balance in full at the end with a direct debit to build a good credit history. This will show that you can responsibly manage credit.

8. Take out a prepaid card to repair your credit

Credit builder prepaid cards can help you improve your credit rating. They charge a monthly fee (about £5), which you'll need to keep paying for 12 months, but at the end they will add an entry to your credit file that you have successfully repaid a debt. A prepaid card doesn't require a credit reference as you don't borrow on it.

9. Space out your credit applications

Credit reference agencies don't get told if you are rejected for credit, but a note is made every time a credit search is made by a lender. Don't use a scatter gun approach to applying for credit. The more credit searches carried out in a short space of time, the less likely you are to be accepted for credit. Space out credit applications and, if possible, try to find out whether you're likely to be accepted before applying. Do not apply for products unless you really need them.

What next?

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