There’s a common misconception that if you don’t have a credit card you will, by default, have a good credit score.

Many young people, and those with no credit history, are therefore shocked to have their application for a credit card unceremoniously rejected.

Not having a credit card is in no way an indicator to an unblemished credit score and in no way makes you more financially attractive to lenders than someone who does.

Worryingly, 60% of people are currently at risk of being declined credit by mainstream lenders, according to a recent report from Aqua credit cards, which takes a closer look at the creditworthiness of the UK.

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It concluded that generally women and young people have less access to credit, with nearly 70% of women and 82% of 18-24 year-olds failing to meet the criteria lenders are looking for.

Those earning a decent salary shouldn’t get too comfortable either. The study found those who earn in excess of £50,000 or those in full time jobs can also struggle to get a credit card or personal loan.

James Jones, head of consumer affairs at Experian, says: “Your credit score will be affected by a wide range of factors, including what credit you have had in the past and how you repaid it. This, in particular, helps the lender establish whether they can trust you to repay credit in the future.

“If you have not used credit in the recent past and your credit report is therefore threadbare, it is highly likely that your credit score will suffer. This is because, statistically speaking, people with little or no credit history are more likely to default on any credit that is granted.”

If you’re not getting a credit card any time soon, you might think you don’t need to worry about your credit profile, but where you feature on a provider’s lending scale can affect other parts of your life.

Your credit score is important when you apply for other lifestyle services and products.

You will often need to pass a credit check when taking out contracts with utility providers, mobile phone companies and broadband services, or even when trying to get the best rates and deals from these services.

Yet the report’s findings show that three quarters of people (79%) have no idea what their credit score is, and half (53%) don’t know how to improve it.

Jones advises: “If you’re worried about your credit history or have been refused credit, start by getting hold of a copy of your credit report. Using a service such as creditexpert.co.uk will also give you access to personal pointers on the things you might do to strengthen your credit history, to help you build a better credit rating.”

If you want to see your statutory credit profile, this costs around £2 from each agency. You can get this from Experian, Equifax or Callcredit. These agencies also offer free services where you can get a rough idea of what your profile looks like.

Take note – numerous applications for financial products, credit profile check requests and other services that require a credit check can leave footprints on your credit profile. This can negatively affect your credit score. Why?

Because this may look to some providers like you have been rejected by many other providers due to the number of credit checks on your profile. So be wary!

When you do get your report, make sure you check everything on the report. If you disagree with something, get in touch with the company that you got the report from and request that they change it and they may do this for you.

If you manage to get this changed, it is worth getting a hold of your credit profile from the other agencies to make sure the error is not on them too.

According to the Money Advice Service, your credit report will typically hold the following information:

• A list of your credit accounts, the dates they were opened, the credit limits or loan amounts, such as credit cards, loans, catalogue accounts, store credit, mortgages etc., if the lender supplies this information.

• Details of any late or missed payments and the number of times missed if the lender supplies this information.

• Details of any people who are financially linked to you, which means you’ve taken out joint credit.

• Public record information such as County Court Judgments (called ‘Decrees’ in Scotland), house repossessions and bankruptcies for six years after they occur.

• Account details – these stay on your report for up to six years after you settle or close an account.

• Your current account provider, but only details of overdrafts.

• Whether you are on the electoral register.

• Your name and date of birth.

• Your current and previous addresses, and

• If your identity has been used for fraud a notification from CIFAS (the UK’s fraud prevention service) to look carefully at your details and not to automatically reject or continue to give credit to a fraudster.

• And from this year onwards, rent payments will also appear on your profile, so make sure you talk to your landlord ahead of time if you think you’ll have trouble paying the monthly rent.

Sarah Willingham, founder of letssavesomemoney.com adds: “Taking some simple steps to improve your score can have a huge impact on your life.

“Things like making sure you’re on the electoral roll, that your credit record has the most up to date address, that you pay your bills on time, and that you only apply for credit when needed, all make a difference.

“And if you are struggling, there are specialist lenders out there who can help access credit and rebuild your credit profile.”

Remember, providers are not looking for a stellar credit score, as they are unlikely to make money off someone who always pays everything in on time every month. A less than perfect credit score is also financially attractive. Providers are generally on the lookout for the right balance between risk and profit.

Top tips for improving your credit score:

• Make sure you’re on the electoral role.

• Pay all your bills on time, even a couple of days can make a difference.

• Ensure there’s no incorrect details on your credit record – check it regularly and if the details are wrong, correct them.

• Try not to use more than 75% of your available credit limit.

• Look into specialist credit card providers which help people to build and improve their credit record.

• Only apply for products when you really need them- applying for more than four forms of credit in a year can lower your credit score.

• Do not apply for more than one product at a time as each application can have a negative impact on a credit record.

• Close old credit card accounts and cancel old direct debits.

• End financial associations with ex-partners. Whilst their own credit rating won’t impact yours, taking out a product jointly with them will.

• Do not take out more than two forms of credit within a six month period.