Use credit cards to bolster your credit report and score

Some consumers believe that credit cards are nothing but trouble, leading only to increased debt and other money problems down the road. While this may be true in some instances, consumers who manage their credit use wisely may be able to improve their credit scores and save money on interest rates.

Credit cards can be an effective way for you to build credit and improve your creditworthiness. A large portion of your credit score depends on how responsible you are with paying your bills on time and how much debt you owe.

If you stick to charging items that you know you can pay off in full at the end of each period, you may be on your way to an improved score because you're demonstrating responsible credit use.

Consumers often get tripped up when they begin charging a large percentage of their available credit. Credit-scoring companies, like FICO, want to see you use credit but generally not more than 30 percent of your total limit. Using more than this indicates you may be too dependent on credit.

While credit cards can help boost scores, they can lead to potential problems even if you manage them appropriately. This is because merchants may misreport your payment history to a credit reporting agency, resulting in an unfair mark appearing on your credit report.

If this happens, you may benefit from credit repair. By working with a credit lawyer you may be able to investigate and dispute the errant item quickly and efficiently.