Got a bad credit history? Take the following steps….

It's a well-known fact that creditors have much better memories than debtors. However, this doesn't mean that you need to be saddled with a bad credit history forever. Take the following seven steps to rewrite your financial history:

1. Start by ordering your credit history. Visit one of the UK's leading credit reference agencies (www.experian.co.uk, www.equifax.co.uk and www.callcredit.plc.uk) and you can find out exactly what information is being held on you for just £2.00. Although your personal credit file won't tell you why you may have been refused credit; it does contain all the information used by lenders to assess your level of risk. File details can vary from agency to agency; so it's a good idea to check all three.

2. Check that everything's correct. Any outdated or incorrect information could adversely affect your credit rating. Lenders use the electoral role to confirm your name and address, so make sure that you are registered with your local authority. Include details of any previous addresses that you've had in past three years (blank spaces are generally treated suspiciously). Any necessary changes should be included on a Statement of Correction.

3. Make sure that everyone in your family pays their bills on time. Credit reports include information on family members which could have a negative impact on your credit history. If you have become separated from a family member (e.g. through divorce or bereavement) ask the credit agency to amend your file.

4. If have been refused credit don't make the mistake of applying to other lenders until you find one that will offer you a loan. The chances of success are slim and you need to bear in mind that each unsuccessful application is recorded on your file and will damage your credit history.

5. Settle past debts. County Court Judgments and unpaid debts are recorded on your credit file for six years. However, once they are settled it will be noted and may be considered when applying for credit.

6. Stay on top of current debt. If you regularly meet existing loan and credit card repayments lenders are more likely to see you in a favorable light. If you are able to pay more than the minimum requirement; not only will you benefit by paying less in the long run, but you'll also boost your credit rating.

7. Be patient. By taking the above steps you've already gone a long way to improving your credit rating, but remember it won't happen overnight.