What's your credit score?

Have you ever checked your credit score?. This is a record of your financial history and is used by lenders to decide if you are a safe lending bet, but all it takes is one small mistake to result in a 'no'. 

More than 20 million people risk being rejected for mortgages, loans and credit cards as banks shun those without squeaky clean credit reports. Many could be turned down unfairly, as more than a third of people who have checked their credit score have found errors on their file, according to research from Amigo Loans. 

A score of less than 720 is judged as poor or very poor by banks and their computers will reject credit applications. 

Just one in eight people have ever checked their credit score. Even the wealthy can't necessarily get credit: over 1 million well paid Brits have been turned down for credit cards, overdrafts and mortgages. 

Lots of factors affect your score including missed bill payments, unauthorised overdrafts and being rejected for credit applications. 

It is vital that anyone who wants to borrow checks their credit score before applying. If there are mistakes or fraudulent activity they can then be corrected to improve your rating and your chance of being accepted for credit. 

You can access your credit score for free via experian.co.uk, clearscore.com and noddle.co.uk .  

One way to improve your score is to take out a credit card and make regular repayments. You need to build up a history of using the card and making payments on time every month. Repay the balance each month to boost your score without paying any interest. For example, buy petrol on it once a month then pay off the bill in full. 

Here are six steps to improve your credit score: 

1. Make sure you are registered on the Electoral Roll at your current address. If you are not it can cause delays when you apply for credit, and some firms may turn you down flat if they can’t confirm where you live. 

2. Make sure all your credit report info is fully accurate and up to date. Dispute it if it’s not. 

3. If you have had previous credit problems and there were special circumstances such as losing your job, family bereavement etc., explain this on your report by adding a notice of correction to any late payments from this period. 

4. If you had financial links to other people which are no longer relevant (such as an ex-partner), ask for them to be removed from your records. 

5. Close accounts you no longer use. A lot of unused credit you can access without further checks may negatively affect your rating. It can also make you more vulnerable to fraud. 

6. Financial ties, such as a joint mortgage or a bank account with a partner, will appear on your credit report as an ‘association’ to your other half, explains James Jones, Head of Consumer Affairs at Experian. Being tied to someone else means that their credit rating could affect yours. "If you are still tied in financially with a previous partner but you no longer have a link, contact the credit reference agencies to have the associations cancelled," he adds.