A financial expert has warned that given the current credit crunch, many lenders are "reluctant" to provide loans to people with poor credit ratings.

Richard Brown, chief executive of the financial website, moneynet.co.uk states that, regardless of the amount of money that a person earns, they are unlikely to be able to get credit, if they do not have a favourable credit rating.

Mr Brown said: “Lenders generally like debt because that's how they make their money, but they are very nervous at the moment because they can't get the funds themselves.”

According to the expert, people ought to check their credit rating and do all that they can to improve, making regular repayments on loans and other debts each month.

Statistics produced by Credit Action, revealed that Britain's interest repayments rose to £94.3 billion in the last year.

The average household now pays an average of £3,790 in interest each year, the organisation also noted.