The research commissioned by credit card provider Aqua found the average family with a low credit rating spends an extra £1,170 each year on mobile phone contracts, utility bills, broadband, credit cards, white goods and cars purchased on finance.

That’s the equivalent of 15 weeks’ worth of food shopping, an annual gas and electricity bill or 10 weeks’ of childcare, the study said.

Households with poor credit ratings pay on average £974 more a year on car loans, £954 on white goods, £483 on credit cards and £402 on mobile phones.

Families are worst affected – poor credit households made up of two adults with children spend an extra £1,225 a year compared to £1,089 for a one person household.

Author of the report , Dr John Glen of Cranfield School of Management, said: “Simply put, poor credit is costing households in the UK billions. It’s alarming that often the people who need the most help are the ones who are charged more for everyday household products and services.”

The study follows a previous Aqua report, which revealed that more than half of the UK adult population are at risk of being declined credit by mainstream lenders because of their poor credit score.

Sarah Willlingham, founder of letssavesomemoney.com added: “A poor credit rating can really impact the price you pay for all sorts of products and services. It’s vital that people understand how important it is to have a healthy credit rating – as aqua’s latest report reveals, it could save you thousands of pounds each year. The great news is that there are simple things people can do to boost their credit rating.”