11 steps to rehab your credit score

11 steps to rehab your credit score, from January 15th Consumer Reports.
The "big three" credit reporting bureaus are Equifax, Experian, and TransUnion.

[Number zero. Avoid borrowing money in the first place. Save up for things.]

Number one. Pay your bills on time. Payment activity accounts for 35% of the FICO score. At least pay the minimum each month rather than fall behind.

Number two. Check your reports by requesting one free credit report every four months through annualcreditreport.com

Number three. 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."[third party requests for your credit score] Instead, carefully read prospective cards' terms and conditions and apply for just one.

Number four. Don't carry 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 [deemed] a negative.

Number five. 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.

Number six. Keep credit balances relatively low. Maintaining a revolving credit balance under 10% of your total credit line is wise, experts say.

Number seven. Beware of points-driven 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 relatives to you're credit limit, which is a negative.

Number eight. Maintain a variety of credit types. Successfully paying an auto loan, a student loan, and credit card bills over the same period, for instance, shows that you're able to juggle different types of credit, a plus. That contributes 10% to your score.

Number nine. 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 debt of a personal loan. And, the interest rate on the loan is likely to be lower than the credit-card interest rates.

Number ten. Pay off debt in collections. It's always better to have zero balances on collections.

Number eleven. Get a secured credit card after a bankruptcy. If you've been through one, start populating your credit report with good credit. Secured credit cards may be an effective way to rebuild your credit. A bankruptcy will have less impact on your score over time as long as you aren't defaulting on new loans. But Chapter 7 and 13 bankruptcies stay on your credit report for 10 years.