The UK economy continued to gasp for air during 2011, growing by less than 1% for the entire year. The final quarter tailed off completely, actually shrinking by 0.2%. The situation looks unlikely to improve. If the first quarter of 2012 ends up shrinking, the country has officially had another recession. The technical definition of a ‘double dip’ is when recession rears its ugly head before the economy has recovered to its pre-downturn level.

Early predictions for the year are gloomy, with analysts on average expecting a paltry 0.4% of growth. Some of them are expecting the economy to shrink by more than 1%. To put that into context, the average annual GDP growth between 1990 and 2008 was 2.3%.

Even if we do see some growth by year’s end, a confirmed recession is anticipated by March (the definition of a recession being two back-to-back quarters of shrinking GDP). If the predictions of a double dip recession prove correct, it will be the first since the dark days of 1975.

All this doom and gloom makes it tougher to obtain credit. But lenders obviously don’t stop lending altogether – you just have to be a bit smarter in how you go about it. And bear in mind, banks and credit card companies interests are aligned with your own, so if they don’t think it’s safe to loan you money, it’s probably not a good idea for you to be borrowing. Nonetheless, there are a few things you can do to improve your chances…

Lenders are in the business of making money, so be prepared to pay more for a loan during a recession. Figuring out what will increase the profitability of the loan for the bank will go a long way to helping you. For instance, taking out insurance on a loan might seem like a waste of money, but if that extra 12 pounds per month is going to make the difference between a ‘yes’ and a ‘no’,it might be worth considering. You might only need it for the first month, as many lenders allow you to cancel the insurance once you’ve got the credit.

Another trusty piece of advice is that unless you’re prepared to do some research on lesser known lenders you’re probably safer sticking with a reputable, established company such as Santander if you intend to apply for credit card or loan products.

Another way of increasing your attractiveness is by opting for a higher interest rate. If you can get a cosigner you will drastically improve your chances of obtaining credit. Similarly, consolidating other debts will make more money for the bank, so if this is an option you should seriously consider it.

If you are struggling with repayments, seek advice from the National Debtline.