Debt Basics

No one has an automatic right to credit, but if you are refused on the basis of your credit rating you can tackle the problem.

Most high street lenders will make a decision on whether or not to grant you credit on the basis of information supplied by the country's two leading agencies - Experian and Equifax.

These two compile credit histories from a host of different sources, including the electoral roll, past county court judgments and how effectively past debts have been paid. It will also be flagged up if you have had an abnormal number of credit checks carried out - everything from buying a freezer on an interest-free deal to opening a new credit card will leave electronic footprints in your credit history.

Contrary to popular opinion, they do not turn down your request and neither do they hold a blacklist of individuals and properties. The decision to refuse credit will be made by the lenders, based on their own criteria. However, if you are refused credit for anything up to £25,000 you should check your credit history to make sure no mistakes have been made.

Within 28 days of your last contact about the credit deal, ask the lender for the name and address of the agency which provided the information. You can then write to the agency asking to see all the information about you on their files. To do this you will need to send a £2 fee, give your full name, address and postcode, as well as the details of any other locations you have been living during the last six years. Also, if you are a sole trader or partnership, give your business name and address in case information is held under these details. The agency must reply within seven days.

If the decision to refuse you credit was made only by a computerised credit scoring system then you have the right to ask the lender to review the decision. Even if the decision was not taken by a computerised process alone but you consider the decision to refuse you credit was unjustified or wrong, and there is further relevant information which may change the lender's mind, you should ask the lender how to go about having the decision reviewed.

You can ask for your credit history to be changed if it is incorrect or includes details about people with whom you have no financial connection. You should also be able to get notes attached to explain certain periods in your history. However, you can't get information removed just because you might find it embarrassing.

You do not have to be refused credit to see what information credit reference agencies hold about you.You have the right at any time to ask them in writing for a copy of your file.