With a massive £1.3 trillion of personal debt in the UK, obtaining credit and staying financially afloat are daily dilemmas for the British consumer. Many major banks, including Lloyds TSB, have recently declared an increase in the number of customers experiencing repayment difficulties, with the need for better financial advice and support has never been more important.

Shadow Chancellor Oliver Letwin said that the current levels of personal debt comprise a “time bomb” that poses a threat to as many as 15 million households.

To help consumers make informed decisions when taking out personal finance products such as credit cards, loans and insurance, a new breed of financial comparison websites has emerged. Since 1997, consumer websites like Moneynet (http://www.moneynet.co.uk/ ), Moneyfacts (www.moneyfacts.co.uk/), and Moneyextra (www.moneyextra.com/) have provided invaluable information to help choose the best financial products. However, what happens when things go wrong and payments cannot be met? The unfortunate borrower gets branded with a bad credit rating and any further loan applications may be turned down, or lenders may charge higher rates of interest if there is a higher risk in the default of a loan. To someone already in financial difficulties, increased rates will of course make a bad situation worse.

Each lender weighs the information contained in a person's credit file differently. However universal contributing factors include:
* Electoral Roll information for a person's currently registered address.
* Payment history for mortgage, credit cards, loans, hire purchase and finance agreements.
* Any County Court Judgments.
* The complete amount owed and the number of credit facilities used.
* The number of new credit facilities that have been applied for (both successful and unsuccessful applications).
* The type of credit used.
* Salary details given on the application form.

The best way of reducing the risk of being classed as a bad debtor, is to improve your credit score and to ensure that a good record does not go wrong.
For people who have been refused credit, or offered loans at atypically expensive rates, here are a few basics on how can you keep your credit file in good shape:

* Immediately register on the Electoral Roll when you move house.
* Pay all bills on time; it's recorded even if you're only a few days late.
* Keep credit card balances low.
* Pay off debt rather than moving it around.
* Only apply for new credit when you need it.
* Build up your credit history slowly, don't open lots of new accounts rapidly.
* Check your own credit file to make sure it is correct.

Source: credit reference agency MyCallcredit (http://www.mycallcredit.com/)

However, should the worst happen it is always best to immediately seek qualified help from the free debt counselling services available including:

* The Citizen's Advice Bureau (http://www.citizensadvice.org.uk/index/getadvice.htm),
* Citizen's Advice Scotland (www.cas.org.uk),
* National Debtline (http://www.nationaldebtline.co.uk/)
* Consumer Credit Counselling Service (http://www.cccs.co.uk/) Richard works in Edinburgh for a media company, occasionally writing for the personal finance blog Cashzilla ( http://cashzilla.blogspot.com/ ), and drinking too much coffee.