How to get the best credit deals: check your credit ratings

Finding the cheapest credit card, personal loan or mortgage can cut hundreds of pounds off your annual bills, so it`s vital to shop around for the best deals.

If you`ve been rejected for a card, loan or any other form of borrowing in the past, or haven`t been able to get the deal you were after, then this could be because of your credit rating.

Every one of us has a credit record, which shows how many loans, mortgage and credit cards we have had, and currently have, and how we good we are at paying these debts off. If you have missed several payments, chances are your credit record and rating won`t be as good as if you`ve managed to clear your debts quickly without falling into arrears. The better your credit rating, the more chance there is of you getting the cheapest deals when you need to borrow money.

So, can you improve that credit rating? The simple answer is yes. If anything on your credit report needs updating, or you think some of the information is incorrect. You can contact a credit agency, such as CreditExpert who can help you to set the record straight - perhaps by helping you to challenge any entries you think are incorrect or adding an explanation if special circumstances account for a blot on your report.

If you`re shopping around for credit - perhaps you want to consolidate existing debts - then ask companies for a quotation before making a formal application and searching your credit record.

If you make too many credit application searches, it may make lenders think you are over-stretching yourself, or even that identity fraud is happening.

Try to make sure you pay your existing credit card bills and loan repayments on time - that way lenders will be more inclined to let you borrow money, because you have shown you can meet payments in the past.

If your credit history isn`t very good, don`t be tempted to turn to a credit repair company for help. These are not credit reference agencies and do not have the authority to amend your credit report. Don`t be tricked into paying for services you don`t need.

"Lenders use their own individual formulas to work out a credit score - that`s why one credit card provider might turn you down while another will agree to give you the card," said Sophie Neary from BeatThatQuote.com.

To give you an idea of your credit score and how lenders might see you, you can order your National Credit Score from CreditExpert for £4.99. This score won`t be exactly the same as the one lenders will use as they all vary, but as a general rule, the higher your score, the more likely you will be able to get the best loan deals.