Debts can spiral out of control quickly if you are not careful, and if you are starting to struggle, work out exactly who you owe money to. Checking your credit report is a good starting point, as it will detail all of the loans and credit cards you have outstanding. The balance and the limits will be on your personal report.

Secondly, seek advice but never pay for debt advice - the Citizen's Advice Bureau, National Debtline and Consumer Credit Counselling Service all provide excellent free-of-charge services and will assist you with a debt management plan.

If you need to reduce your spending, then consider cutting up your credit cards so you cannot run up more debts. If you cannot make a payment, call the lender and explain your position. Whatever you do, respond to red letters - many people have found themselves in difficulty when it comes to meeting their payments, and you are more likely to get a sympathetic response if you call the lender, rather than the other way around. Often they will agree to reduce your payments.

Are you worried about debt building up?

Fight back and take control of your finances. Banks, credit cards and loans all put enormous pressure on families keeping up the payments. Interest rates and late payment fees can quickly become overwhelming and it's important that families take charge and make more than just the minimum payments each month whenever possible.

Debt Consolidation

Consolidating your debts into a loan with a single lender may reduce your monthly payments and free up your income, but you may end up paying a lot more to clear them over the longer term. Take advice before you do this, and if you take this route, do not be tempted to start using your credit card and store cards again.

How can you make yourself as credit worthy as possible?

The better your credit rating, the more likely you are to get a credit card or loan. Your rating refers to how you have managed credit in the past, and helps lenders decide how you may handle it in future.

Check the report is up-to-date, to have the best chance of getting credit when you need it.

Credit Blacklists

Credit blacklists do not really exist, if one lender turns you down, another may lend to you. If you cannot get credit, then check your credit report to find out why.

Disputing Credit Scoring Data

Ask the credit reference agencies to reassess any data you think is incorrect - you have to go to the company concerned to get any incorrect information changed, or write to the credit reference agency and it will contact the lender for you.

While the dispute is being sorted, you can add a Notice of Correction - a 200 word statement explaining any entry on your credit file -  which will be seen by any lender looking at your file. This can slow down decisions.

Separating your financial history

Getting divorced or splitting from a partner is an emotional time, but it will also have an impact on your credit rating if you do not split your finances properly.

There are number of ways that you can avoid any financial difficulties following a split:

• Check your credit file
• Make a note of all joint financial commitments and agree on how to split them. Even if your ex-partner says he or she will pay it you’re still liable if they don’t.
• Contact the lenders involved and inform them of the debt you have taken on – this may involve signing new loan agreements or credit card applications.
• Make sure that you get back any credit cards from your ex-partner where they are the second card-holder – you will still be liable for their spending.
• Once you have sorted out all the credit commitments jointly listed for you and your ex-partner inform the credit reference agencies that you wish to be disassociated from your ex. If you don’t, whatever they and/or future partners do can affect your credit file for the next six years.

Why have you been refused credit?

Ask the lender why you have been turned down if this happens to you, it should tell you. You should also be able to find out if it has used a credit report to assess your application, most will have.

Lenders use a combination of data to decide whether they will to you, including:

Information supplied by you at the point of application 
Data supplied by a credit reference agency 
Information about any existing accounts you already have with the lender

Credit scores are used to determine how much of a lending risk you are when you apply for a loan, and it could be that the lender will automatically refuse to lend to someone with a County Court Judgement against them for more than a certain amount. But do not give up, other lenders will have different rules.

Beware though as the more lenders you apply to in a short space of time, the worse it looks on your credit record.

Defaulting on a loan

If you cannot make a payment and simply don't, then you will get a black mark on your credit file with the credit reference agencies. It will flag to other lenders that you potentially have problems, which will make it harder to get credit in future.

Any money that you owe someone is a debt, whether that is a friend, relative, on a mortgage, credit card, loan or overdraft.

If you are struggling with managing debt, you will not be able to meet your repayments, defaulting on your loan and thanks to interest and penalty fees, your debts will be getting worse. Whatever you do, don't ignore this and hope it will go away. It won't.

If you miss payments, it will impact on your credit rating and may prevent you from getting credit in future, or if you do, you may have to pay more interest on it.