Image by Javier Micora, Valencia, Spain
The UK's credit rating slide from a gold-plate AAA to a slightly tarnished AA1 feels like it has been a long time coming, the result of accumulated debt and sluggish growth a sinking feeling that is perhaps familiar to millions of us, too.
Personal debt in the country hit an astonishing £1.422 trillion at the end of 2012, with individuals owing almost as much as the entire country produced during 2011.
A credit rating whether it's Britain's or yours measures the probability that you'll repay what you owe, on time and in full, and too much borrowing is just one factor that can cause it to drop. The good news is that it's possible to take control of your own finances and prevent your credit rating going the way of that of the nation and your own credit report is the best tool to monitor that.
Check what's on your credit report
Your credit report is essentially an overview of your borrowing behaviour - a personal history of the credit you've had and the repayments you've made, from mobile phone accounts to mortgages and more, and lenders use it to help decide if you'll be able to make new repayments on time.
It's free to see your Experian credit report with a 30-day trial of CreditExpert. New members only. Monthly fee applies after free trial. Free trial period starts on registration further ID verification may be required to access full service, which may take up to five days.
See what lenders see
Lenders use information from your credit report to calculate your credit score, so it pays to make sure it's accurate. They may not expect you to have a perfect credit report, but they do want to know that you will make repayments on time and that you aren't already over-stretched.
Pay on time, every time
Use some credit on a regular basis, but never take on more than you can afford. Lenders look for proof that you're a reliable and responsible borrower and late or missed repayments stay on your credit report for at least six years. Stay within the agreed credit limits and always make your repayments on time, paying more than the minimum off your credit cards each month if you can. You can stay on top of your credit card spend and bill payments with money manager software.
Check all your information is correct
Make sure everything is accurate and up to date and query anything that isn't. Also, make sure you register to vote at your current address, as lenders use the electoral register to help confirm who you are and where you live.
Don't use a scattergun
Space out your credit applications and avoid making several applications close together as this can signal financial stress. Credit scoring can look at the average age of your accounts, awarding extra points for longstanding relationships, so try not to chop and change all of your accounts on a regular basis.
Close unused accounts
That emergency credit card or small loan you keep in case you need them could drag down your credit rating because lenders may take into consideration the amount you could borrow, not what you actually owe.
Refused credit? Don't panic
It may be that you're better off applying for a different credit product. As a CreditExpert member you can get help finding finance deals that suit your credit profile.
Keep your eyes open
Watch out for unfamiliar or suspicious entries in your credit report. With Experian CreditExpert you'll get alerts every time there's a major change to your credit report, which could indicate identity fraud.