By Mark Mitchell
Know Your Money Editor

Your credit score will determine whether or not you will be able to borrow money so it is important to put yourself in the best possible position and ensure that you avoid doing damage to it. Credit card companies will take account of your financial history with banks, credit cards, store cards and lenders.

If you never borrow, never get into debt, always repay your credit cards 100 per cent first time then you will not get picked up by the radar of Credit Checking Agencies like Experian, Call Credit and Equifax.

At the other end of the scale if you have lots of credit cards, miss payments, have county court judgements, bankruptcy , apply for credit and fail too often or apply and do not take it up then you may end up with a bad credit score. Don't leave yourself with a negative footprint. Although blacklists don't exist, it is true to say that a bad credit record can prove difficult to shake.

However, there are a number of things that you can do in order to protect your credit rating from unnecessary damage and improve the likelihood of getting what you want...

Ensure you're on the electoral roll
This is one of the first things you should do. Every credit agency will make use of this information so it is essential to be on the electoral roll.

Show a good credit history
Building a good credit history or repairing problems that you've had in the past may be a good move. If you've no credit you're more likely to be rejected by lenders. Therefore it is a good idea to try and build up your history.

One of the best ways to do this is by getting a credit card which is easy for you to manage. Any kind of credit can allow you to build up a decent credit history provided that you operate it perfectly. To do this you need to make sure that you never miss payments and always stay within your limits.

Avoid continually applying
If at first you don't succeed, try, try again, but only after you've applied for your credit report from the three main agencies to find out why. Don't get into the loop of continually applying and being rejected. This will instantly make a less welcoming proposition for future applications.

Cancel any unused credit cards
Having access to credit, even if unused, can put lenders off. If you have a range of unused cards then cancel them. High credit limits give you the ability - in the eyes of lenders at least - to go on a major spending spree at any time. This will lower your available credit and hopefully improve your prospects of the getting the deal that you want. However, accounts with good records over a reasonable length of time are worth leaving open as they can improve your credit history.

Pay on time
You should always endeavor to pay your bills on time. Even the minimum repayment plan is better than missing a payment all together.

Just one missed credit card or bill payment can negatively impact on your credit rating so it is vital to ensure that you make the monthly payment on time. The easiest way to do this may be through direct debit. If you are really struggling then it is best to contact your lender to change your repayment schedule - this won't hit you as hard as defaulting, although it will still affect your credit score.

Check the address on all active accounts
Even if you have not used a credit card or mobile phone contract for years if the account is still listed as open and you had a different address at the time then this can interfere with applications due to identification checks. Ensure that you check your file and go through every active account's address to ensure that everything is up to date.

Stability is a positive sign
Demonstrating that you are in a stable position is a positive sign for lenders. In their eyes an employed homeowner is better than a self-employed renter. The stability of your employment is also an indicator, as is your bank and current address. The longer that you can demonstrate things have been consistent the better.

Spread out applications
Try to spread out your applications for credit. Don't apply for too many forms of credit in a short space of time. This could be credit cards, personal loans, mortgages or insurance.