How do you rate for credit? Take our self test

Maybe you are among the one in four would-be borrowers who can't get credit at a competitive price because of your "adverse" credit record. There are steps you can take to improve your rating and land a better deal.

When you apply for a personal loan, lenders will check your details with credit reference agencies to see whether you have defaulted on previous credit agreements such as loans, mortgages and credit cards. They also use a "scoring" system based on information you provide when you apply for loan. They use the information gathered from the credit reference agency and their credit scoring to decide whether to lend to you and, in some cases, at what interest rate. You need to score highly to be accepted.

Lenders keep their credit scoring methods to themselves, but our self test below provides you with a guide to the sort of information used to determine your credit rating.

Just answer the questions below and see how you score and what that result means. You'll also find some top tips on how to improve your chances of getting credit.

The self credit rating test

1. Are are you registered to vote on the electrol roll at your present address? Yes/No

2. Do you have at least two active credit accounts, such as a credit card, store card or loan? Yes/No

3. Are all your credit account payments up to date? Yes/No

4. Have you missed any payments on your credit accounts in the last two years? Yes/No

5. Do you have any County Court Judgments or have you been declared bankrupt? Yes/No

6. Have you ever defaulted on a credit agreement? Yes/No

7. Have you applied for more than two items of credit in the last six months? Yes/No

Your score

Based on your answers above award yourself the following points and total up your score.

1. Yes = 10. No = 0.

2. Yes = 10. No = 0.

3. Yes = 15. No = 0.

4. Yes = 0. No = 10.

5. Yes = 0. No = 25.

6. Yes = 0. No = 25.

7. Yes = 0. No = 5.

What your score means

90-100: Excellent. Your score shows that you would be a strong candidate for credit.

70-85: Good. Your score shows that you have a good chance of being granted credit.

50-65: Fair. Your score shows you may have some problems obtaining credit.

0-45: Poor. Your score shows you may have considerable difficulty in obtaining credit.

How to improve your credit rating

Here are a few simple suggestions as to how you might improve your credit rating.

Our self test offers a basic guide. If you have been refused credit its worth checking the information credit reference agencies have about you.

You can get access your credit report online from Equifax or Experian who are the two leading credit reference agencies in the UK. Check for any mistakes and apply for any inaccuracies to be corrected. Furthermore, if your circumstances have changed since your experienced credit problems then say so. You can place a Notice of Correction on your credit file explaining your financial situation, which a lender will review when accessing any credit applications you make. For instance your past credit problems may have been as a result of being made redundant or going through a divorce and as a consequence you fell behind on credit repayments.

If you have been refused credit, it's not going to help you if you carry on applying elsewhere. Every search a lender makes on your rating will leave "footprints" on your credit file. This may look like you are financially over-stretching yourself.

If you're not registered on the electoral roll, get yourself registered. Lenders like to see you have a permanent address and use the electoral roll to determine this.

If possible make more than the minimum payment every month on any existing loans. You will benefit from paying back your debt more quickly by paying less in interest and you will build a positive payment history.

If you have paid off (settled) and past CCJs against you, make sure this is recorded on your credit file. If not, contact the court to get confirmation details and inform the credit reference agencies.

If you are in debt and unable to get credit you need to take a hard look at where your finances are going wrong. It may be helpful to see expert advice. You could call the National Debtline on 0808 808 4000 or the Consumer Credit Counselling Service on 0800 138 1111 or ask see the debt adviser at your Citizens Advice Bureau.