Making sense of borrowing The BBC programmes looked at credit cards, loans and mortgages, focusing on those that charge high rates of interest and the problems over-indebtedness can cause. In fact, the type of loan or card you are offered and the interest that you are charged is heavily influenced by your financial history. If a lender sees that you have defaulted on repayments in the past, they may charge you higher fees and interest to cover the risk you represent. If you have a clean history of repaying what you owe on time, you are likely to get a get a better deal. So it pays to look after your credit history. Try these simple steps:

• Take an honest look at your finances and create a budget for yourself. You must be realistic – for example, don’t pretend you can live on bread and water to save money. Include loan repayments in this plan – and stick to them.
• Pay your bills on time. If you cannot manage to do so, always contact the lender and explain your situation. You can then reach agreement on a repayment schedule that you can afford.
• If you have a number of debts at varied interest rates, you could consolidate them into a single, more cost-effective loan. See iff you can reduce your outgoings with moneyExtra's debt consilidation tool.
• Consider cutting down on credit and store cards. You could shop around for a better deal or look at interest-free balance transfers that will give you time to plan how you are going to tackle your debts. Just remember – credit cards aren’t free money and you do have to repay what you owe at some stage.
There are also some things to avoid. They include:
• Organisations or individuals offering you an easy way out of debt by providing expensive emergency loans. You should always go to a reputable financial services provider and be aware of the interest rates being charged by competitors.
• Going bankrupt. With recent changes to the law, it’s easy to imagine you can walk away from your debts and have the slate wiped clean within twelve months, when bankrupts are normally discharged. In fact, a bankruptcy remains on your credit record for at least six years and could act as a red flag to lenders when you apply for credit during that period. That could mean you won’t get credit or will have to pay high interest – and your problems could start all over again.
Getting help Good places to get unbiased advice include the Consumer Credit Counselling Service at www.cccs.co.uk and the Citizens’ Advice Bureau at www.adviceguide.org.uk You can also find hints on how to make the most of your money and deal with debt at CreditExpert partner pages, along with links to organisations that can help you to straighten out your finances.