Many people, and especially those experiencing debt problems, live in fear of getting a ‘bad credit rating'. Whilst not paying back your debts can negatively affect your financial future, many lenders want you to be more scared of being ‘blacklisted' than you need to be.

The following are three essential things to know about credit rating, to help you sort fact from scary myth:

1.       Credit blacklisting doesn't exist

Each lender has their own idea of the ‘perfect customer' and they all score a credit history differently. You need to remember that just because you have been turned down by one lender, this doesn't mean that all will reject your application. Each will assess your needs, affordability and likelihood of repaying what you are asking for before making their decision.

2.       You need to check your credit file

Don't just take it for granted that everything in your credit history (the list of your dealings with lenders and credit agencies, as well as any debt problems you may have experienced) is correct. Check your credit rating at least once a year or before taking out big loans such as mortgages, using reports from the likes of Experian, Equifax or Call Credit. If there are any errors or issues with ID fraud, get them corrected as they can give you a poor credit rating that you don't deserve.

3.       How to boost your credit score

There are many ways to improve your credit rating, paving the way for any borrowing you may want to do in the future. Firstly, you must ensure that you make repayments on time and address any debt problems. Then, try small, simple methods to make yourself more attractive to lenders, like getting a landline, ensuring you are on the electoral roll and cancelling old, unused accounts.