Consolidating your debts during a credit crunch

Debt consolidation loans, along with other forms of credit, may be harder and/or more expensive to obtain at a time like now, when lenders are taking fewer risks with their money. Having a bad credit rating may only make it harder.

If your credit report is stopping you from being accepted for a debt consolidation loan, then you might want to look at the points below:

• Look at your credit report. If you find any mistakes, you have the legal right to have them corrected.
• Try to resolve any problems you find on your credit report. CCJs (County Court Judgments), for example, can't be removed, and will stay on your credit report for 6 years. However, if you can afford to repay the debt, you can have it classed as 'satisfied'.
• Register to vote - being on the electoral roll can improve your chances of being accepted for a debt consolidation loan.
• Open a bank account.

Finally, choose your lender carefully. You shouldn't apply for every debt consolidation loan you find. Instead, search for a lender who specialises in helping people in your situation. By applying for every loan you can, you could damage your credit rating.

This is because every application is recorded on your credit report - if you've applied for several loans in a short space of time, lenders may think that you're desperate for money and that no-one wants to lend it to you.

If you want advice on your credit report and/or debt consolidation loans, you should contact a professional debt adviser.