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Being turned down when you apply for credit is never a happy experience. Often, the problem lies in your credit history, which is recorded in your credit report. Lenders check this file of information about your credit accounts – from loans and cards to utilities and catalogues – when you apply to them. A trail of bad debts isn’t likely to encourage them to trust you, while a history of making repayments on time and in full should count in your favour.

Seeing what lenders see about you and taking steps to improve it will put you in a stronger position to borrow in the future. These tips will get you started.

• Understand how lenders work. They want to see that you can repay what you borrow comfortably and on time, so they look at your application form for evidence that you earn enough and check your credit history to see what you’ve already borrowed and how you’re coping. You should check it too, to be sure it’s up to date and accurately reflects your circumstances. It needn’t cost you a penny – it’s free to see your Experian credit report online when you take a trial of the credit monitoring service CreditExpert.

•Ask why you were turned down. You may be able to do something about it – or you may simply not fit the profile for that particular deal. For example, you might not earn enough or be too young.

• Build a credit history. One reason for being turned down is simply that you don’t have a track record of taking out credit and repaying it according to your agreement. You could start with a credit or store card with a low spending limit, using it for everyday shopping and pay the bill in full each month. That way you don’t get into debt and you demonstrate that you’re a responsible borrower.

• Register to vote at your current address. – it will give your credit rating a boost and if you’re not on the electoral roll, or are down at another address, lenders may ask for proof of residence or even turn you down.

• Make sure all the information in your credit report is accurate and up to date. For example, look out for any clerical errors or accounts you’ve closed that are still marked as being operational. If you find something you disagree with, contact the relevant lender and put your side of the story – be prepared to provide proof. Likewise, check that any court judgments that have been satisfied or bankruptcies that have been discharged are correctly recorded. Contact the court if you have any queries.

• If there’s a reason for past problems, tell the credit reference agencies that hold your credit report – Experian is the UK’s largest – and ask if you can add a note of explanation that lenders will see and may take into account in future. For example, you might have missed a few repayments because of an accident.

• If you’ve been turned down, ask why. You may be able to make improvements or give an explanation that will help your chances. Equally, you may simply not fit the profile for that particular deal. For example, you might not earn enough or be too young. You can also use this process – known as adding a Notice of correction – to explain that you have a thin credit file because you simply haven’t borrowed much in the past.

• Don’t fire off lots of applications in the hope that one will be accepted. When lenders search your credit report to assess your suitability, it leaves a record, known as a footprint. If you leave too many of these in a short period, it can make other lenders think you’re desperate for money. Instead, research your options carefully and ask for a quotation before you apply.

• Don’t let an ex’s credit history drag you down. Look at the section of your credit report headed Financial associations. It contains the names of the people with whom you share a financial connection, such as a joint account, perhaps a credit card or mortgage. When you make an application lenders may also look at these people’s credit reports, as their circumstances could affect your ability to repay what you owe – and your ex’s money troubles could mean you can’t get credit. It’s best to separate your finances when you’re split up, agree who’ll pay for what and ask your lenders to set the record straight.

• Never skip repayments – it will damage your credit rating and will be listed in your credit report for at least 36 months. Other lenders will see this and may think you could let them down as well. Instead, talk to your lenders if you’re struggling to make repayments. They may be able to reschedule your repayments, so you pay smaller amounts over a longer period, or even give you a few months off while you get yourself organised.

• Protect your identity. ID fraud – when a criminal gets hold of enough of your data to take over one of your accounts or set up new ones in your name – is one of the fastest-growing crimes of the 21st century. Regular checks on your credit report allow you to spot suspicious applications, new accounts or high balances and stop the trouble before it can develop. You’ll find more useful advice at www.identity-theft.org.uk.

• Don’t try to borrow your way out of trouble. If you can’t afford your repayments now, how will you manage more? Instead, talk to your lenders to see if you can come to an arrangement that will allow you to get your finances in order. It might also be worth seeing if you can roll up debts charging higher interest into a single, lower cost loan.

• Take control of your finances. Set yourself a realistic budget, look for an additional source of income, ensure that you’re receiving any benefits to which you’re entitled – and keep a close eye on your credit report with a free trial of CreditExpert. It lets you see your Experian credit report as often as you want.

• There is no easy way out of money problems – unless you win the lottery. An IVA or bankruptcy will remain on your credit report for at least six years, which will make it difficult for you to borrow even when you’ve sorted yourself out. It’s better to ask for help from one of the organisations offering free advice – try Citizen’s Advice at www.citizensadvice.org.uk, the Consumer Credit Counselling Service at www.cccs.co.uk or National Debtline at www.nationaldebtline.co.uk. Your local council may also run financial counselling services.