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With millions of people facing unemployment, it is more important than ever that all those who may be unable to prove their income have a great credit score.

The Confederation of British Industry has predicted that unemployment will peak at 3.25 million early next year, and all the while the affordability calculations for financial products are getting ever tighter. This means more people will have to make sure that in the eyes of mortgage lenders, they are a sure bet.

Owen Roberts, head of Callcredit, says: "As redundancy becomes a real possibility for more and more people in the UK, consumers need to keep a closer check than ever on their finances. Our own research has shown that 28% of couples could not last more than two months on their joint savings if their partner lost their job. Checking your credit report will give you a comprehensive overview of all your financial commitments and can highlight where you can make savings in order to best cope with any unexpected changes in your financial situation."

As well as regularly checking your credit score online, there are other easy tips that can be done to make sure that your score is as high as it can be. For a start, make sure to work out what your income is and balance that against realistic outgoings. This will allow you to create a manageable plan every month, and should make sure that you don't go overdrawn. If a lender sees you go beyond your limits, they will doubt your ability to handle your own finances.

This means setting a budget and sticking to it. Always bear in mind that everything you do has a consequence to your credit score – the more you can prove that you can handle your finances, the more likely a lender will say yes to finance.

If you are taking out new credit, think carefully about how you would manage the repayments if interest rates start to rise again, or if you suddenly find yourself out of a job. This is especially important in the case of mortgages and secured loans where your home is at risk. Long-term planning is always key to any financial decision.

There are many other things you can do to polish your score, but the main thing is to stick to a plan of action. As well as proving your worth, lenders want to see that you can handle finances over the long-term and that you can juggle your finances in the good times and in the bad. If you can prove this via your credit score, you will have a much better chance of hearing 'yes' from your lender.

SOURCE: Callcredit, CBI, 21/04/09

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