Have you ever applied for credit in the form of a loan but found that you have been turned down for no apparent reason? Your credit rating can and will affect credit and loan applications so it is important to be as careful as you can about yours.

First things first though and the first step should be applying for a credit report. Several specialist companies now offer free credit reports that will allow you to see where you have gone wrong. A credit report has the added bonus of allowing you to ensure you have not been the victim of identity fraud as you will be able to see if anyone else has applied for credit in your name.

There are several reasons why you may have been turned down for credit or a loan, including a poor credit history. If you have debts and have missed payments or have county court judgments against your name your credit report is likely to be poor, which will affect your ability to take out a loan.

Alternatively, it could be your partner’s financial problems that are scaring lenders off, so make sure they get a credit report too so you know where you stand.

Another thing that can affect your chances of being accepted for a loan is the number of credit applications you have made in the past. When you apply for credit, make sure the lender is aware that you are only after the initial quotation prior to making a full on application – multiple applications can go against you.

Other things to bear in mind include your address. A lender will use this information to make sure you are who you say you are so make sure you are registered to vote at the address you are applying from otherwise you may be turned down.

If, after you receive your credit report, it turns out you have a less than perfect credit rating, there are ways of improving it and your chances of getting credit in the form of a loan.

One of the most important things to do is keep on top of existing debts. Missing one payment can do more damage than you think, but consistent payments on time can also do wonders for your credit report.

It can also be worth signing up for small things like store cards and paying off the balance each month in order to improve your credit rating.

However, improving your credit report cannot happen over night, it takes time, effort and self control. And, if you have been turned down for a loan, it is often wise to work at rebuilding your report before applying again, unless you are a absolutely desperate.