A good credit score is much sought after as banks and insurers step up checks during the recession. Experian, Britain’s largest credit reference agency, warns that banks now regularly credit-check those who apply for a current account regardless of whether they want an overdraft. Factors such as moving to a “less desirable” area can also adversely affect your rating.

Financial services firms have historically looked into credit histories when anyone applied for credit. The very act of searching leaves a footprint on your file and can lower your credit score — whether your application is granted or not.

A credit rating affects applications for a mortgage, credit card or even mobile-phone contract. If it is low, companies may refuse to take you on.

James Jones at Experian, said: “Banks have always carried out credit searches but the downturn has made them increasingly vigilant as they try to limit the risks of lending to their fragile balance sheets.”

Here, we look at factors that can affect your credit score and give advice on repairing your record:

Beware the postcode lottery

The majority of people with good credit scores own their homes — lenders see tenants as a poorer risk. Your postcode is also a big factor. Moving from a smart area to a less affluent one can lower your score.

Richard Catlin at checkmyfile.com, a credit information service, said reference agencies assume you live near other like-minded people, so if your neighbours borrow recklessly, it could damage your chances of obtaining credit.

Although applications for a large sum, such as a mortgage, are assessed individually, your postcode might be a greater concern if you were applying for instant credit — a mobile-phone contract or store card, for example. This is because companies tend to use an automated scoring system based on whether an area is at risk of bad debts.

Cut credit file ties

Being financially linked to someone else — by having a joint mortgage or joint current account — can influence your credit score. Even after they are no longer in force, you can still be associated with the other party on your credit file.

If you split with your financial partner, write to the three main credit-reference agencies — Experian (experian.co.uk), Equifax (equifax.co.uk) and Callcredit (callcredit.co.uk) — and ask for a “notice of disassociation”. This will stop their credit history affecting yours in the future.