Repairing a bad credit history

Consolidation loans. Don't automatically be tempted to take out a loan to pay off all your debts. You may lose the flexibility to, for instance, prioritise creditors. Also, the loan may be secured against your possessions.

Credit repair companies. Don't believe companies that offer to 'repair' a bad credit rating. It's not possible - legally anyway.

Be wary of
Sub-prime lenders. These are (mainly American) companies that lend money to people with bad credit histories at very high rates of interest. This helps them rebuild credit histories, but at a price. Exhaust all other avenues first.

Tackling a bad credit rating
But what if you think you've already got a poor credit rating?

Here's a scenario you may recognise. Your debts are getting out of control and you apply for a loan to pay them all off in one go. Thanks, but no thanks, says the lender. We've checked you out and we just can't take the risk.

Here's another. You find the kitchen of your dreams in your local department store and ask to pay for it in monthly instalments. The store makes a few checks and turns you away.

What do you do next? Click over for some questions and answers that may help.