You can’t afford to neglect your credit rating, it is one of your most valuable assets. Lenders use it when deciding whether or not to lend to you and it can dramatically affect the rate of interest you pay. So make sure yours is in good shape.

It’s all too easy to let your credit rating slip, especially if you take your eye off the ball. Everything from missing a payment on a monthly mobile phone contract to going overdrawn without arranging an overdraft first can come back to bite you.

The fact is that every payment you miss, or direct debit that you forget to set up can damage your credit file and the odds are that you won’t notice the ill effects until you try to get a mortgage or a credit card.

Inaccurate and out-of-date information can also put a dent in your credit file. Make sure all the information held on you is accurate and if there are errors, contact the company that has given the credit agency the inaccurate information involved and ask them to rectify the error.

The only way to do that is to see what lenders are being told about you. Check your credit files on a regular basis. And yes I do mean files, plural. In the UK, there is no such thing as a universal credit rating. There are a number of credit reference agencies - the main three are Equifax, Experian and Call Credit - and each lender will use one or more of these credit reference agencies to get a picture of how reliable a borrower you are.

Where they are all consistent though is that they all use behavioural patterns - specifically your behavioural patterns - to help a lender work out whether you’re the sort of customer they want.

That’s why keeping up with payments, being a reliable payer and having a solid and complete history will all count in your favour. And making sure the data held on you is accurate is just as important.

Important Information

The value of investments and the income from them can go down as well as up, so you may not get back what you invest. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. You should regularly review your investment objectives and choices and if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser.