9 steps to rehab credit scores

Credit- scoring models are like snowflakes: There are a lot of them, and no two are exactly alike. FICO alone sells 65 versions.

Because of that variation — and because a lender might not use the same credit scores you obtain — Consumer Reports suggests that you be aware of the range of your scores and follow their trend over time. John Ulzheimer, a credit expert at the website Credit Sesame and formerly of FICO and Equifax, recommends these other points when managing your score:

1. Pay your bills on time. Payment activity accounts for 35 percent of a FICO score and 40 percent of a Vantage Score. At least pay the minimum each month rather than fall behind.

2. Check your reports by requesting one free credit report from a different reporting agency every four months through AnnualCreditReport.com. “Hard pull” credit inquiries — from a potential lender and others with permission from you — can lower your scores slightly. But there’s no penalty for checking for yourself; that’s called a “soft pull.” Credit-scoring companies consider multiple inquiries by lenders within 45 days as only one inquiry because the timing suggests that you’re shopping for interest rates for one loan, not multiple loans.

3. Don’t apply for multiple credit cards at once. Unlike applying for a mortgage, auto or student loan, applying for several credit cards generates multiple hard pulls. Instead, carefully read prospective cards’ terms and con- ditions, and apply for just one.

4. Don’t cancel plastic you don’t use, unless it carries an annual fee. Stick the card in a drawer instead. Part of your score depends on the ratio of the credit you use on your credit cards to the total value of your open credit lines. Eliminating a card reduces your credit line and can raise the ratio, which is a negative.

5. Don’t open too many new credit accounts at once. By doing so, you lower the average “age” of your accounts, which can lower your credit score.

6. Keep credit balances relatively low. Maintaining a revolving credit balance under 10 percent of your total credit line is wise, experts say. A higher ratio indicates an elevated credit risk.

7. Beware of points-driven high balances. If you charge everything on your rewards card for the points, switch to cash or a debit card for a couple of months before applying for new credit. Lenders can’t tell from your score whether you zero-out your balances every month. They’ll see your credit score, a snapshot in time, showing that you’re charging a lot relative to your credit limit, which is a negative.

8. Maintain a variety of credit types. Successfully paying an auto loan, a student loan and credit-cards bills over the same period, for instance, shows that you’re able to juggle different types of credit -- a plus. That contributes 10 percent to your score.

9. Get a personal loan to pay off your credit-card debt. You can improve your credit score by paying off the score- damaging “revolving” debt of credit cards with the score-benign “installment” debt of a personal loan. And Consumer Reports notes that the interest rate on the loan is likely to be lower than the credit-card interest rates.