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A credit score is simply the metric by which the banking industry determines how well people handle debt and therefore whether they are a worthy candidate for a loan or mortgage. The score, which is just three figures long, tells financial providers if a particular person is a good bet so they can make money out of doing business with them.

The Rental Exchange scheme records your rental payments and sends the results to Experian. You need to actively sign up to do this by paying your rent through a company called Credit Ladder, which then passes on your money to your landlord or letting agent, so run this past your landlord to check that they are happy with it first. Equifax and Callcredit don't yet consider rental payments.

If you want to keep on top of your credit score, the best advice is to check with all three credit reference agencies. Everyone should do this at least once a year, and it is highly recommended that you do it again if there is a big application in the offing. This way it is possible to note any potential errors and correct them before they become an issue.

There are ways you can actively boost your credit score too. If you have old credit cards that have a zero balance but are still open, this can help keep your credit history looking good. Lenders like to see that a person relies on a good mix of credit. If someone has a few credit cards, a mortgage, a car loan and so on, it all counts in their favour.

The agencies all have different maximum scores too. Experian's score is out of 999, Equifax's is 700 and Callcredit's is 710. It is difficult to correlate between the three because they have different scoring scales too. So, your credit score may be, say, 459 with Equifax, 997 with Experian and 600 with Callcredit.

In the UK, consumers are subject to three different credit scores from three separate credit reference agencies: Experian, Equifax and Callcredit. In the United States it is Experian, Equifax and TransUnion.

A monthly credit-card balance below 30 per cent can gain you 90 points on your credit score, according to Experian, which scores from 0 to 999. A score of around 780 is fair, one of above 961 or higher is excellent. A card balance above 90 per cent will cost you 50 points.

Noddle lets you check your Callcredit score and is 'free for life'.

What people do not realize is that although debt is portrayed as something you should generally avoid, having no credit history is as bad as having a faulty one. Banks need something to go on.

You are also judged on things like how long you have been with the same employer, how long you have lived at your address, and how long you have had your bank account.