Five ways to improve your credit rating Richard Anderson, 29, is hoping to use the Government's Help to Buy scheme next year for a first home in Kent. He has been in his current work - a quality control officer for a fire equipment firm - for many years, and has not missed payments on his cards or other commitments. But with more than £8,000 debt across three credit cards, the most recent of which was taken out a year ago, his credit score is comparatively low. His balances on the cards equated to about 90pc of the total limits - and this "high credit utilisation" is something which usually deters lenders. There are three major credit reference agencies in Britain: Equifax, Experian and Callcredit. Each allows consumers to check their records or, for a fee, to obtain a credit score which gives a snapshot of how a typical lender might view them in terms of credit risk. Mr Anderson used Experian's service - where he obtained a below-average score of 772. The agencies differ slightly in how they grade applicants but all three divide applicants into categories of "creditworthiness." In Experian's case, scoring less than 560 ranks "very poor." The next grade up is "poor," followed by "fair" - into which Mr Anderson fell. A "good" rating is obtained with a score of between 881 and 960 and "excellent" are those who score upward of that, to 1,000. But Experian reckons Mr Anderson could improve his rating to "excellent" within a year. It said just two measures would boost his score: the first would be to cease making further applications for credit - including mobile phone contracts. Allowing existing credit lines to "mature," while reducing outstanding balances, would add about 100 points to his score. The second step would be to cut his total borrowing to about 50pc of his limits, Experian advised - giving a new score of 960-plus and pushing him into the top category. Importantly, however, he should keep the credit cards going, rather than close the accounts. Mr Anderson said: "I was going to pay off the cards as fast as possible and then close them. But now I realise lenders want to see that you have access to credit but choose not to use it - it makes sense. Until now I've more or less been at the top of the limits. Credit agencies typically charge £10-£15 a month for services which both help potential borrowers improve their scores and also act as a safeguard against fraud. Services are usually offered free for a month, after which the fee is debited from the customer. Signing for the free period, then cancelling the following month before any regular payments, can be a cost-effective way of obtaining a comprehensive snapshot of your credit file at low or no cost. How to make sure lenders approve your home loan Wanting to maximise the chances of a successful credit application? Some ways in which lenders and agencies score applicants seem counter-intuitive, but understanding them could mean the difference between getting the mortgage or credit card you apply for and being rejected. Build an address history Lenders" need to check where you have lived tops their basic requirements. With no official record of past addresses you could be speedily rejected. Pete Gettins of mortgage broker London & Country said: "It's the one factor where even if everything else is perfect, potential borrowers are declined." A recent student moving rapidly through different accommodation or other frequent movers can be affected - but ensuring you are on an electoral roll, however briefly, should mean the lender can readily trace an address history. Mr Gettins added: "You can potentially plead a case with the lender if you're turned down on this basis, but proving an address history without official records, such as the electoral roll, can be time-consuming and tricky." Get access to credit - but don't use it If you've never borrowed or signed up to a mobile phone contract, for example, you could be declined for a mortgage. Mr Gettins said: "Those living virtuous, debt-free existences give lenders nothing to go on - so are often rejected." It's best to have some credit facilities in place, without using all of them As in the case of Richard Anderson, using all of your available credit counts against you. In his case Experian said he should aim to use just 50pc of his limit. Don't close unused card accounts If you close an account the unused facility no longer shows on your record. And don't apply for more credit for a period of time. Lenders want to see a history of credit management, so if you're at or near your current limits, and apply for more, this will count against you. "Mature" accounts are those where borrowers have managed within their limits and generated a sustained history of on-time repayments. These are good, in the lenders" eyes. If you have an overdraft limit, stay well within it As with credit cards, don't nudge up against, or exceed, your agreed overdraft - this looks as if you are desperate for further credit rather than managing existing borrowing.