Slay to win!

IT'S myth-slayer time for credit-and I'm going into battle so you know exactly where you stand.

So let me make it plain-you DON'T have a credit rating. And, like unicorns or dragons, credit blacklists DON'T exist.

Yet you DO have a credit FILE, and with the crunch biting, check what they're saying about you NOW.

This is especially important as this week credit reference agencies have new information on you that will hinder those looking to play the system. Luckily there's a loophole so you can check your file for FREE (see below).

But first, let's separate legend from reality.

MYTH 1: You have a credit rating

The Truth. Whether for loans, mortgages, contract mobiles or credit cards, every company calculates its OWN credit score system to see how you match up against its perfect customer wish-list.

These systems are NEVER published and aim to PREDICT your behaviour based on your history. They decide both if you'll be accepted AND what rate you'll pay. Outrageously, they don't have to detail why you're rejected.

MYTH 2: You're on a blacklist

The Truth. It may feel like a list dictates who's good and bad, but that's because while scoring systems work differently, most knock out bad risks. Yet, if you're medium-risk, don't assume rejection by one means rejection by all. Different priorities mean diverse acceptance criteria.

MYTH 3: It's all about risk

The Truth. It's PROFIT that counts. It's so critical I'll shout: "Even good risks get rejected because they won't make the bank money!" Banks CHOOSE customers for THEIR own good. The perfect bank customer is always in debt, making minimum repayments, and constantly paying interest. If you always repay in full, you're not giving them anything. If they can weed you out, you may be rejected.

It's more than just that, though. They may advertise a great bank account deal in the hope of luring new customers to flog 'em mortgages, then score on how desirable a mortgage, NOT bank, account customer you are.

MYTH 4: All fines go on credit files

The Truth. Only institutions offering credit facilities appear on file.

Parking/driving fines, savings details, medical problems, criminal convictions, Child Support Agency, student loans, defaults older than six years don't.

MYTH 5: They know everything about your finances

The Truth. They use three sources- your application form including salary, family and homeowner status, any past dealings with you, and information from credit reference agencies Experian, Equifax or Callcredit.

This trio scans the electoral roll, court records indicating debt problems or bankruptcy, and data mountains sent by financial companies which fall into two camps:

Black data. This indicates whether you have debt, missed or late payments and regular financial problems.

White data. This is about how you manage accounts. And from this week, it includes how much you repay (whether minimum or more) and if you have promotional deals.

Lenders claim this new "white" data sharing is part of an irresponsible lending clampdown. My worry is they are really salivating over weeding out CLEVER customers who constantly jump between 0% deals and play the system.

CHECK YOUR RATING FOR FREE

You have a legal right to see your file for £2 by post. Yet credit agencies also sell fancy-schmancy online products adding LITTLE extra value but LOTS of extra cost.

Yet here's a loophole. Bag free month-long trials for high-end services. Sign up, grab the passcode, check your credit file, then cancel BEFORE the direct debit subscription kicks in.

There are two main agencies to try. Log on to www.creditexpert.co.uk for Experian and cancel by calling 0800 656 9000, or apply to Equifax on www.equifax.co.uk then cancel by phoning 0870 0100583.

BOOST YOUR SCORE

SINCE lenders score differently, there aren't any hard and fast rules, yet these will help:

Be on the electoral roll. Otherwise credit is VERY unlikely. NEVER miss or make late payments. This can kill access to new credit. Set up direct debits for minimum repayments, then overpay on top.

Beware of joint accounts/ mortgages. It's not marriage or relationships that count-the ONLY way your credit score can be linked with another's is via a JOINT mortgage, bank or savings account. If your partner has a poor credit history, avoid.

"Delink" after divorce. If you had joint finances, write to credit agencies asking them to "delink" you from your ex.

All applications "hit". Every time you apply for credit products, it adds a search to your file, so never apply willy-nilly.

Spread applications. A burst of credit search activity can severely hurt your file, as you'll appear desperate for credit.

Cancel unused/old cards. Shrink your available credit, though be careful with long-standing bank accounts as then a good history is helpful.

Stability and income help. Homeowners rather than renters, and full-time staff rather than self-employed, score higher. Ditto fixed landlines over mobiles for security checks. Moving home is damaging. Apply before upping sticks, heading for maternity leave or if you think redundancy is looming.

(Re)build credit history. Nab a hideous interest rate-for-risk card like Barclaycard Initial, Capital One or Vanquish. Then spend a little every month but ALWAYS fully repay to avoid interest. After a year, this should help you move mainstream. See moneysavingexpert.com/creditscore .

TV money guru Martin Lewis is the creator of the consumer Revenge website MoneySavingExpert.com which is packed with information on how to get more money in your pocket.