Consumer Reports: How to repair your credit score


Credit scores are used for many transactions, and a low credit score can stand in the way of your hopes and dreams, like buying a house or a new car, even getting a new job.

Consumer Reports reveals important tips on how to repair your credit score if it’s in the dumps.

Depending on the reasons for a low credit score, it can take months or even years to raise a low score to a good score -- say 700. It also takes discipline.

One of the most important things to do is to pay all your bills on time -- that accounts for about 35 percent of your FICO score, the most common credit scoring system.

Consumer Reports says if you have credit cards, try to keep your balances to no more than 10 percent of your available credit. Anything more could show elevated credit risk.

Another tip is to consider taking out a personal loan to pay your credit card debt. Plus, you may get a lower rate of interest with the loan. Having a greater variety of credit types might help your credit score.

If you can’t get a traditional credit card because of your credit history -- go for a secured credit card, which requires a deposit to protect the issuer. Make timely payments and your credit score could improve.

And finally, request a free credit report once a year from each of the three reporting agencies, Experian, TransUnion and Equifax, to monitor your progress and spot any errors. You can do that through AnnualCreditReport.com.