The banks are proving as tightfisted as ever when it comes to lending, meaning we've all got to work that bit harder to borrow money.
Whether you are shopping for a personal loan, mortgage or credit card, the potential lender will look at how much credit you already have access to. So to improve your chances of getting a loan you should reduce the credit you already have.
1. Work out your credit limit
The first thing to do is add up all your credit card limits and overdrafts so you know exactly how much credit you already have at your fingertips.
2. Decide what credit you need
Now you know how much credit you have you can work out how much you need. You may find you don't need the loan you were going to take out as you can simply use the credit you already have. But check the interest rates of your credit first.
3. Eliminate the excess credit
The next step is to get rid of all the credit you have access to but don't use. This means cancelling credit cards and closing bank accounts with overdraft facilities you don't need. You should also consider reducing the credit limits on your credit cards or your overdraft if you never go close to your limit.