If you’ve ever wondered how the UK credit rating system works, then you’re not alone. On average 165,000 people in the UK search online each month for the phrase ‘What is Credit Rating?’. What’s more, there are countless posts in forums from consumers asking credit-related questions, which are often answered completely incorrectly.

aqua card, a specialist lender for people with bad credit, has created an infographic which aims to clear up all the credit confusion. The infographic, aptly named ‘What is Credit Rating?’, explains what makes a credit applicant a high or low risk borrower and what banks and credit providers really know about you. To help consumers on their way, the graphic also includes a five-step checklist with tips on how to improve your personal credit score, with tips including using a credit card and managing it responsibly, and making sure you’re on the electoral roll.

Emma Davis, an online manager at aqua card, says: “We realise that lots of complex financial copy on a webpage can be overwhelming for customers, so creating an infographic was the perfect way to explain a detailed topic in a clear and concise format.”

The launch of the graphic comes at a time when credit is extremely prevalent in the news. In October 2011, Credit Action, a leading UK debt charity, revealed that the average amount owed by every UK adult is £29,546 (including mortgages). The debt charity also found that, as of the end of August 2011, the average UK adult has borrowed £4,257 using credit cards, motor and retail finance, overdrafts and unsecured personal loans. In addition, Credit Action calculated in October 2011 that 334 people every day of the year will be declared insolvent or bankrupt – the equivalent to 1 person every 59 seconds during a working day.

With this in mind, it seems that now, more than ever, UK consumers need to ensure they are informed and, if not already, working towards manageable debts.

Here’s the infographic: