If you're looking to borrow money this year, you need to read this article first.
The financial crisis is forcing many people to clean up the dirty habits they picked up during the boom years.
In the new puritan atmosphere, Jamie Oliver is cutting out swearing, Jonathan Ross has been punished for his smutty ways, and everyone is desperate to apply the carbolic to the banking sector.
And if you looking to borrow money or refinance this year, you'll have to keep it clean as well. Because the slightest smudge on your credit record could be enough for lenders to turn their nose up at you.
Clean is good.
Nasty habits can be hard to break, and plenty of people have become a little unkempt in their borrowing in recent years.
If you've missed a single mortgage, credit card or loan repayment in the last six years, it will show up on your credit report, and in these fastidious times that could be enough to make it much harder to borrow money. (Read The Secret Way Banks Keep Tabs On You to find out more about this.)
As lenders tighten their criteria, and cash-strapped borrowers get muck up their credit reports, more and more people are being refused credit.
This is hurting both borrowers who want to consolidate existing debts onto something cheaper, and those looking to take out new finance.
Dirty data.
You may think that your credit report is squeaky clean, but if you're applying for credit, it might still be worth checking first. (You can get a free report via the Fool.)
This report amasses financial info from banks, building societies, credit card issuers, mobile phone companies, utilities, and HP and mail order firms. It also stockpiles data from public records such as the electoral roll, court judgements, and bankruptcy proceedings.
The three main credit reference agencies, CallCredit, Equifax and Experian, hold onto this data for six years.
They also stow details of any credit you have applied for in the last 12 months (although your file doesn't record whether your application was accepted or rejected).
When you apply for a mortgage, credit card or loan, the lender will visit your file to confirm your identity, check for past credit problems, and see whether you are financially overstretched.
Raw.
Many people wrongly assume that credit reference agencies assign a "score" to this data, setting out whether you are a good lending risk. They don't. All they do is supply raw data to lenders, who then run it through their own scoring systems.
Lenders score the data in different ways. A sub-prime lender, for example, would set looser criteria than a mainstream lender. So just because one lender rejects you, you shouldn't give up altogether.
Credit reference agencies are also put keen to point out that there is also no such thing as a blacklist, where troublesome borrowers are left to rot.
Telltale footprints.
You don't even have to have fallen behind on a repayment to muddy your credit report.
Every time you apply for credit you leave a search "footprint" on your personal credit file.
If you have made multiple credit applications in a short period, this may suggest you have financial problems. If you're already a borderline applicant, this could swing the lender's decision against you.
So avoid making indiscriminate multiple credit applications, because you might end up in a vicious circle, where every failed credit application further blotches your report.
It may also be worth speaking to a broker or even the lender first, to check the odds of success before making a formal application.
Clean your act up.
So how do you get your hands on that credit report? Fool partner CreditExpert offers you free access or you can get it direct from a credit reference agency. (Credit reference agencies are legally obliged to let you see a copy of your report for a statutory fee of just £2.)
Even if you are free of credit blemishes, it may still be worth checking for factual errors. Your report may also reveal any ID fraud, if somebody has been making applications in your name.
You can also boost your chances of getting credit by doing a bit of "housekeeping" on your file.
First, check you are registered on the electoral roll. If you aren't, some lenders will automatically reject your application.
Then make sure all the information on your report is accurate and up to date. If you have paid off a County Court Judgement (CCJ), for example, check this has been recorded on your file.
If you do spot any errors, the agency will remove it from your report for 28 days, while it checked out your complaint. If the information is wrong, it will be removed.
If you've had past credit problems due to personal problems, such as illness, redundancy or divorce, you can add a 200-word "notice of correction" explaining why. This could sway the balance in your favour.
Also check your "financial associates", such as an ex-spouse or partner, because your credit record may still be linked to them. If they are running up debts, you could suffer. Tell the agency to sever the link.
Holding a vast array of credit cards could count against you, even if you have little or no outstanding balance. Each card grants you several thousand pounds worth of credit, and new lenders may be wary about offering you even more. So you might want to close one or two down.
And keep it clean.
And of course, do all you can to stay clean in future, by paying all your bills in time. Even a missed mobile phone payment will show up on your file, and raise doubts in the mind of a prospective lender.
Borrowing money is hard enough these days, so do all you can to improve the odds in your favour.
More: How To Improve Your Credit Rating
> Get your free credit report from Fool partner CreditExpert.