The new year signals a new start for Briton's finances according to an industry expert. Frances Walker, Consumer Credit Counseling Service (CCCS) spokesperson said that the first weeks of 2008 are the best time for people to control their money situation. The pressure is on people's bank balances after the excesses of Christmas, and demands on outgoings will increase as the year goes on.

A significant number of homeowners may face a rise in mortgage payments as fixed rate deals come to an end and interest rates soar. The recently announced rises in utility charges will also contribute to the squeeze on many people's, already tight, budgets.

Many people see debt consolidation as being the solution to their problems, such a loan would allow consumers to meet numerous demands at once and leaving them with a disposable income.

However at this tough time in Britain's economy many people are struggling to get accepted for credit. The number of people refused credit in the UK rose last year as lenders tightened the criteria on which they lent.

Equifax completed a survey of its customers and found that 63% had been refused loan or credit card applications. An annual poll revealed there was a 16% increase in the number of people being refused credit.

The Bank of England has also released data which has shown banks and building societies are making borrowing harder for customers, the demand for bad-credit credit cards have risen.

Neil Munroe, external affairs director at Equifax said: ?What our survey supports is industry expectations that lending criteria would be tightened following the credit crunch mid 2007. Clearly this presents a challenge for consumers looking to get new credit in the early part of 2008.?

Equifax's poll also revealed that 49% of people who are declined credit do not know why this decision has been made. Last year's rising interest rates pushed up mortgage repayments and other outgoings, meaning more people missed payments which would adversely affect their credit rating.

Munroe said: "With a number of interest rate rises during 2007 many consumers have been feeling the pinch and have perhaps fallen behind with payments, but with tightening lending criteria in the aftermath of the credit crunch, lenders will be looking more closely at applicants' credit histories. And late payments could be enough reason to refuse a loan."

Of the people surveyed who were declined credit 52% said that it was probably because of missed payments on other credit agreements, a rise of 85%.

A possible solution to credit refusals is the secured loan, a credit agreement that is secured against your property. Lenders are more willing to loan money if they have collateral to guarantee the return of the money they are lending, although if payments are not kept up your property may be at risk. The credit crunch may not only increase the amount of secured loans taken out but may also indicate rises for secured loan leads companies.

The January sales encourage people to keep spending despite it being a tight month after Christmas, people must ensure they can afford to both shop and keep up with bills. A bad credit rating will damage your ability to take out credit cards, loans and sometimes even phone contracts.

Due to the current lending situation in the UK lenders are scrutinizing customer's credit histories, even one missed payment may dissuade the lender from agreeing to a credit agreement.

The best way to stay on top of debts is to do a strict budget and to stick to it. Obviously this must incorporate any existing debts and take into account any money that comes in each month. This will make it more likely that payments are met each month and a negative credit rating is avoided.