CR: Repairing your credit score

(Consumer Reports) Credit scores are used for so many transactions. 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. That type 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