5 big things that impact your credit score - and how to repair it

A high credit score turns strangers into friends ready to issue you a loan at a lower rate, rent you that cool apartment, and offer you a satisfying new job. A low score, however, could taint your reputation with doubts about your financial stability and personal indulgences, costing you more to borrow money or to get insurance, and closing doors to housing and employment opportunities. No amount of charm, talent, or feats of strength can whitewash credit scores.

There are five things that FICO and the experts at STCU say can affect your credit score:

1- Payment history. Your payment history can include everything from library fines, cellphone payments, child support and medical debts.

2- Amounts owed. The credit bureaus compare how much of your credit limit you borrow on credit cards and other revolving credit. A so-called utilization rate that exceeds 30 percent will drive your credit score down.

3- Credit history. Your practice of consistently paying back debts over time demonstrates an ability to repay.

4- New credit. Checking your own credit history will not affect your credit score, but applying for a credit card or loan may lower it, particularly if you make several applications in a short period of time.

5- Types of credit. Maintaining a variety of accounts – mortgage, car loan, credit cards, and so on – can affect your credit score positively.

Bankruptcies, delinquencies, collections, charge-offs, judgments and unpaid tax liens can haunt your credit report for years and often account for huge reductions in your credit score. For instance, a payment that’s 30 days late may reduce your score by 40 to 110 points, but a bankruptcy may drop the score by 130 to 240 points.

Not all is lost, however. Your credit score can be repaired. Visit the STCU Money Blog for more details about how your score is calculated, and six ways you can go about repairing it.