Before you even start applying for a mortgage or a loan it’s important to know what you might be up against.

You should obtain details of your credit record, either via post or online, for just a few pounds – to find out exactly how you stand.

It might not be as bad as you think – and even if it is at least you are armed with relevant information.

There are three major credit reference agencies – Experian, Equifax and Call Credit – which collate and store financial information about UK consumers. This data includes details of missed and late payments as well as any county court judgments against your name that might help lenders decide whether to grant credit and the rate of interest to charge.

Your credit records stay on your files for six years, while searches made – which are triggered every time you apply for credit – will normally be there for a year. This means that debt problems a long time ago are unlikely to affect your rating.

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