Improve your chances in the mortgage battle

1. If you're over 18 and have ever taken out a credit card or loan, apart from a student loan, then you have a credit report, which is held securely by a credit reference agency - Experian is the UK's largest.

2. Lenders usually check your report when they decide whether to make you an offer and what terms, such as interest rates, to set. It helps them to make informed and responsible decisions.

3. As well as listing your credit accounts and showing whether you make repayments on time and in full, your credit report contains a range of information that helps lenders to assess whether you are a reliable borrower and can afford to take out more credit.

This data includes details of any court judgments against you for non-payment of debts, plus bankruptcies or individual voluntary arrangements you've taken out.

3. The electoral roll shows if you have registered as a voter at your current address. Lenders check the roll as a precaution against fraud, to make sure that you live where you say you do.

4. Another section lists the people with whom you share a joint account, such as a credit card or mortgage. These people are known as your financial associates.

Their credit report details don't appear in your report but lenders may look them up separately because their circumstances could affect your ability to repay what you owe.

5. All this information comes from two major sources. Some is from public records, such as court records and the electoral roll. The rest is contributed by lenders. Some lenders only share negative information, such as missed repayments. Others also share positive information, such as regular repayments.

6. Only you can view your credit report. Lenders are allowed access to check your credit history but only when you've given them consent. You have a statutory right to see your credit report.

7. Lenders use credit reports to assess whether potential borrowers are reliable, stable and do not already owe more than they can comfortably repay.

To calculate the chances that you'll make your repayments, they take the information in your application form and credit report and allocate each item a value. They then use a unique formula to calculate a credit score. Generally, the higher your score, the easier you'll find it to borrow.

8. You don't have a single credit score because every lender uses a slightly different formula in their calculations. Some even use different formulae for different products, so you could get different decisions if you applied to the same lender for a car loan and a store card.

9. Your credit score also changes over time, as your circumstances change. For example, paying off a loan could improve your score, while missing a couple of repayments could cause it to fall.

10. Regular checks on your credit report help you to take greater control of your finances. It gives you a snapshot of what you owe and how well you are coping. It could also help you to see where your money is going and identify areas where you could cut back.

11. It makes sense to check your credit report before you apply for a new credit account. Remember, these aren't limited to obvious cards, loans and mortgages - they include anything where you get access to products or services and pay for them later, from utility bills to catalogue accounts.

12. Monitoring your credit report also provides valuable protection against identity fraud - one of the fastest-growing crimes of the 21st century.

Because your credit report contains a record of your credit accounts and tracks the applications you make, you can easily spot unfamiliar entries or credit account searches that could indicate an attempt to borrow money in your name. That allows you to stop problems before they have a chance to develop.

13. Don't take a scatter-gun approach to getting credit. Each time a lender searches your report in response to a credit application, it leaves a record, known as a footprint. Other lenders who see a lot of these may think you're desperate for money or even suspect a fraud. Either way, lots of footprints could count against you.

14. If you fear that your credit history isn't good enough, don't make any new applications. Instead, work on improving your credit report. In the short term, you could close down redundant accounts and register to vote. Longer term, you should work to pay off some of your debts. You could also roll up several more expensive debts into a single, cheaper loan.

15. If you uncover any errors, contact the lender who supplied the information and ask them to amend it. Be prepared to provide proof - for example, that you closed an account after repaying it in full.

16. If there are special circumstances surrounding an entry, you can contact the credit reference agency and explain what happened. For example, you might have missed a few repayments because you had an accident but have never had problems before or since. They can add a note about this to your credit report, which will be seen by future lenders. Again, be prepared to provide proof.

17. Checking your credit report shouldn't be a one-off, emergency measure. To keep on top of your finances, you should monitor it regularly and ensure it remains up-to-date and accurate.

18. You can track your progress by ordering your Experian Credit Score, which is available to CreditExpert members - you can order it during your free trial. It won't be the same as a score calculated by a lender, because it uses only the information in your Experian credit report, but it will show you the likely impact your credit history will have when lenders score you.

Improve your rating: To view your personal credit information that lenders are currently basing their credit decisions on, apply now for a free online credit report. Click here for a free 30-day trial and a free copy of your Experian credit report