If you have a poor credit rating, it can affect your ability to borrow money or to access other financial products. Although there’s no such thing as a ‘blacklist’, it is possible for you to have a bad credit rating – and you may not even know. Websites such as www.moneyadviceservice.org.uk offer advice on personal loans, setting out things to consider before you apply for credit.

Your first step is to check your credit rating. You can run a free trial on www.thisismoney.co.uk but this will only give you an indication and every lender will run their own series of checks.

The good news is that problems you may have had in the distant past don’t necessarily affect your credit rating. Credit checks are designed to give a current picture of your financial situation, so most information about your credit history is held for around six years. However, you should be prepared for recent problems to affect your rating.

Credit checking agency Experian lists ten common myths associated with credit ratings – including the fact that addresses shouldn’t be ‘blacklisted’; your credit score is based on you personally, not on those who have lived in your house before. The biggest cause of poor credit is people missing payments or making late payments, so make sure you have arrangements in place to pay bills on time.

There are three main credit checking agencies in the UK: Experian, Equifax and Callcredit – you can check your credit rating with all of these providers (some charges may apply).

When you have your report, check it for mistakes and if you think something’s not right, complain to the credit reference agency concerned. While they’re investigating your complaint, lenders won’t be able to rely on the disputed information while they make their decision about whether or not to lend to you.

There are some non-financial things which can impact your credit rating, such as not being on the electoral register. You can sort this really easily by contacting your local council. Also, cancel any credit cards you don’t use any more.

In the longer term, you’ll need to prove to potential lenders that you can pay reliably and on time, so work out a plan to resolve any outstanding debts. If you’re struggling with debt, charities such as Step Change can help you work out a realistic plan to get you back on track – they could even negotiate with your existing lenders for you, and their advice and assistance is all free.