How to wipe the slate clean again

A temporary lapse in financial good sense can leave a lasting impression on your credit worthiness. Loan defaults and County Court Judgements (CCJs) stay on the files of credit reference agencies for six years (unless you pay off a CCJ within the first month). The first thing a lender does when first considering you for a credit card, a loan or a mortgage, is to check your file.

But it is possible to repair your credit status without resorting to subterfuge or the services of credit repair companies. 'These companies can charge anything from £50 to £200 but there is nothing they do that you can't do yourself,' said James Jones, spokesman for Experian credit reference agency.

The worst thing you can do is lie about a County Court Judgement or claim you never received the summons in the first place.

The first step to a DIY credit repair is to obtain your credit files from the three main credit reference agencies: Experian, Equifax and relative newcomer Callcredit. Each of the agencies charge £2 for this.

Don't go from lender to lender hoping to be accepted. Every time a lender checks with a credit reference agency it shows up on your file. To a lender these 'footprints' can indicate that you are over-extending yourself financially, being refused by other lenders and forced to look elsewhere, or that there could be a potential fraud involved. 'If you are shopping around make sure this is logged as an enquiry not a full search,' said a spokeswoman for Equifax.

Deborah Shields, team leader with National Debtline, suggests that once you have obtained your files from the respective credit reference agencies you could show these copies to any lender you approach and allow them to form an initial option. If your financial misdemeanour was some time in the past there may be another reason why you are facing problems.

Your personal record may be influenced by financial mismanagement of a former spouse, relative or business partner. It is possible to have a Notice of Disassociation added to your file. This effectively filters the other person's information from your credit file.

You can also add a Notice of Correction. This can be used where there is a piece of information that is correct but could benefit from being set into context. For example, a credit default from a time when you had been made redundant or following divorce.

If you are refused credit ask why. It might have to do with their scoring procedures. Because different lenders may use different scoring systems you might find you can get a loan or credit elsewhere. The good news is that taking out some form of credit and then successfully meeting the repayments can help rehabilitate your credit status.

There is also a growing range of 'sub-prime' products and lenders in the market place, who may demand a bigger deposit on a mortgage or charge a higher interest rate but are as reputable as their colleagues.

Experian 0870 241 6212
Equifax 0870 010 0583
Callcredit 0870 060 1414
www.ukcreditrepair.co.uk - links to support organisations.
National Debtline 0808 808 4000.