New data from Equifax showed the mortgage market was returning to growth, with May 2015 recording the second highest volume of loans in eight years.

However, many borrowers could be missing out on deals by having untidy finances, it has warned.

“Lenders will typically look at an applicant’s credit history when determining whether they meet eligibility criteria and may also use credit information during affordability assessments,” said Lisa Hardstaff, credit information expert at Equifax.

Since the introduction of the Mortgage Market Review last April lenders are asking more questions about a borrower’s finances than ever before.

Hardstaff added: “It’s therefore worth anyone planning on applying for a new mortgage or remortgage to get themselves ‘mortgage ready’ by checking their credit report before making any applications.

“They should also remember that lenders will take into account the information provided on the application form, as well as look at an applicant’s income and outgoings to ensure they can afford the mortgage they are applying for, now and in the future.”

Equifax said borrowers should follow these nine steps to get their finances in order:

1. Check your credit report

Apply for a copy of your credit report as much as 6 months before you start making new applications for credit. This will allow you to review your report to ensure it is accurate and up-to-date.

2. Do you have a credit history?

Lenders typically look at your credit history when making a decision on your application. If you already have a history of meeting your financial obligations, including repaying credit cards, loans or credit accounts and service contracts, lenders can use this to decide whether to approve your application. If you don’t have much credit history you could consider taking out small amounts of credit in order to demonstrate your ability to responsibly manage credit and repay debts. If you decide to do this, ensure the full balance is paid off each month to avoid being charged interest.

3. Are you registered?

The electoral roll is used by many companies for identity verification purposes in order to combat identity fraud. It is important, therefore, that you are registered on the electoral roll at your current address.

4. Correcting errors

If there’s a mistake on your credit report and it is in relation to a specific account, contact the lender or service company it relates to and ask for the error to be corrected. If you’re unsure which company to contact, you can contact the credit reference agency concerned and they can raise this with the lender or service company on your behalf. In most cases the correction will appear on your credit report within 28 days.

5. The right to explain

You can also add a ‘notice of correction’ to explain any items on your report, such as missed payments, which may have occurred due to life changes, such as losing your job. The ‘notice of correction’ will only be recorded with the Credit Reference Agency (CRA) you provide it to and will stay on your credit file indefinitely. The lender will see it when considering an application.

6. Individual Voluntary Arrangement (IVA) and County Court Judgments (CCJ)

If you are declared bankrupt or take out an IVA, it could impact your ability to gain access to credit during that period.

If you’ve had a County Court Judgment and it is now settled make sure the settlement is recorded on your credit file. If not contact the court to get confirmation details and inform the credit reference agencies.

Both these events will stay on your credit report for six years.

7. Managing existing credit agreements?

Try to pay more than just the monthly minimum on credit agreements and where possible keep credit balances low. Settle debts, such as personal loans or hire purchase agreements in full. This demonstrates your ability to repay debts. Missed payments may make lenders think you’re already struggling with debt.

8. Have you got cards you’re not using?

Lenders will often look at the total amount of unutilised credit available to an individual and consider this when making a lending decision.

9. Don’t apply for credit too regularly?

Avoid multiple applications in a short space of time. Each application logs a search on your credit file. Too many could appear as if you already have too many commitments.