According to research by Which?, Britons should check their files with all three of the country's credit reference agencies - Call Credit, Experian and Equifax - at least once every year, or whenever they want to borrow money, as doing so could see them get a more competitive rate of interest on their loan. The firm claimed that as various credit providers use reports from different agencies they do not always hold the same information on consumers when judging their ability to make repayments on borrowing. And with a credit check costing about 2 pounds each, consumers were advised that it could be "money spent well" if it helps to secure a lower rate of interest.



Martyn Hocking, editor for Which? Money, said: "Checking your credit files is quick, simple and cheap. You can check all three files for a total cost of 6 pounds - definitely money well spent when you consider what you could pay in additional interest if there's a mistake on your files. You don't have to pay for expensive options promoted by the agencies though and watch out for unnecessary ID theft insurance - you can protect yourself for far less simply by checking your files and bank statements."

Overall, about one in five Which? members who have had their credit history checked out fully were reported to have unearthed a mistake in their file. Meanwhile, an internet survey by the consumer watchdog revealed that some seven out of ten respondents have never had their files checked by a credit reference agency.

However, those found to generally have a poor financial rating and who are consequently forced to take out a bad credit loan could well access cheaper borrowing in the future. James Cotton from London & Country Mortgages told the Times that if such consumers ensure that they meeting payment demands over the term of their loans, then by the time they have made their final repayments they should be able to have repaired their record enough to take out a more competitively priced product in the future.

His comments follow research carried out by GMAC-RFC which indicated that about three out of four consumers with a sub-prime loan are between the ages of 35 and 54. In addition to facing higher rates of interest, such borrowers were also reported to be "clobbered" with additional higher lending charges. Meanwhile, Savills Private Finance representative Melanie Bien claimed that those who have a "blip" on their credit report as a result of occasionally missing repayments should still be able to take out a competitively-priced loan if they take the time to research the various options available to them.

Earlier this week, Ray Boulger, senior technical manager of John Charcol, claimed that as the number of Britons with a poor credit history rises "there must be the right solutions in place to break what can become a vicious circle of debt".