Repairing a bad credit history

They list any existing credit agreements - ranging from mobile phone contracts to mortgages, but not overdrafts - plus details about how good or bad you are at keeping up-to-date with payments.

Most of the main lenders provide this information because, if they don't, they're not allowed to make inquiries about other companies' customers. Credit agencies also use publicly available data gleaned from sources such as electoral rolls and court records.

The agencies supply the raw data to lenders, who use different formulae to work out whether you're a good risk. They concentrate on things like your income, existing debts and repayment record.

What should I do if I'm turned down?
Don't trek from lender to lender until you find one willing to take you on. Every rejection leaves a 'footprint' on your file. The more footprints you amass, the more wary lenders become.

Ask both reference agencies to send you a copy of your file - even if the lender that turned you down used only one of them. Everyone should do this on a regular basis, whether or not they've had problems with credit applications.