My experience: Trouble credit card debt can affect your credit score

It probably has, though if it was an isolated example, and you’ve met all your repayments since then, you should still be able to borrow without too much trouble. Credit information about you is kept in a central agency, Credit Advantage. Every time you apply for credit, the lender can look up your file to check your credit record. Credit Advantage keeps files on everyone who has applied for credit in the past five years. As well as keeping records of when you applied for or inquired about finance, it also keeps records of court judgments and bankruptcies and, more importantly in cases like this, details of seriously overdue accounts and those which have been settled or brought up to date.

If you’ve had a problem in the past, your best bet is to be upfront about it when you’re applying for a new loan. Disclose the problem, and tell the lender how it was settled. The odds are they’ll find out about it anyway, and nondisclosure would be a further black mark.

Credit Advantage only keeps information for live years (bankruptcies and other serious infringements can be held on file for seven years); if you are refused credit on the basis of information received from the agency, the lender will advise you of the fact and recommend that you get a copy of your file.