5 Easy Steps to Boost Your Credit Score in 2023

Are you looking to boost your credit score in 2023? Build your credit score this year with these five simple steps and make a lasting change.

Paying off holiday debt, avoiding too many credit applications, raising your credit limit and making rent and utility payments count are all great ways to build your credit.

Additionally, inspecting your credit report regularly can provide insight into how lenders view you and what areas need improvement.

With the right approach, you can take proactive steps towards building a solid history of financial responsibility that will support your goals for the future.



Paying off Holiday Debt

As the holiday season ends and the new year begins, it’s important to be mindful of your financial health. One way to get a jump start on improving your credit score in 2023 is to pay off any holiday debt you may have accumulated.

If you haven’t already, take some time to review your account statements and calculate how much debt you owe from holiday spending. To avoid letting this debt negatively impact your credit score, create a budget and set aside funds for repayment.

It’s also helpful to pay more than the minimums on your most recently opened accounts first. This will help keep balances low, which benefits your credit score.

Another option is setting up automatic payments or payment reminders so that you can stay on top of bills in the future. This ensures that you won’t miss any payments or incur late fees, which are detrimental to your credit score.

If you need more clarification on how well-automated payments would work, try manual payments for a few months until you feel comfortable with them.

CONSIDER SETTING UP AUTOMATIC PAYMENTS
CONSIDER SETTING UP AUTOMATIC PAYMENTS

Remember that paying off holiday debt quickly and responsibly will go a long way in helping improve your credit score in 2023!

Key Points

  • Pay off holiday debt to improve credit score in 2023
  • Review account statements and calculate holiday debt
  • Create a budget and set aside funds for repayment
  • Pay more than minimums on most recently opened accounts
  • Set up automatic payments or payment reminders to avoid missed or late payments
  • Consider trying manual payments for a few months before fully automating payments
  • Paying off holiday debt quickly and responsibly can help improve credit score

Applying for Credit Responsibly

As you build your credit for 2023, you must be mindful of the impact of applying for new credit on your score. Credit applications can show up as hard inquiries on your credit reports, which can lower your score by a few points.

To avoid this, apply for credit responsibly; research each lender and product to ensure it fits into your financial plan and that you’re likely to qualify before applying.

When evaluating potential lenders, look at their requirements and consider whether you already meet them.

Target lenders who offer pre-qualification tools that let you see if you likely qualify without affecting your credit score.

These tools allow you to compare offers from different lenders and get a sense of what terms they may be willing to offer before filling out an application.

Try to space out any new applications or take advantage of simultaneous applications when shopping around for a loan or credit card. Simultaneous applications are when multiple lenders receive an inquiry at the same time (e.g., within 14 days) that looks like one inquiry on your report.

This way, the inquiries appear less often– meaning less damage to your credit score –before any decisions are made about granting you more credit.

Key Points

  • Credit applications can show up as hard inquiries on credit reports and lower score
  • Apply for credit responsibly by researching lenders and products and making sure they fit your financial plan and are likely to qualify
  • Consider lenders with pre-qualification tools to compare offers and see terms without affecting credit score
  • Try to space out new applications or take advantage of simultaneous applications when shopping for loans or credit cards
  • Simultaneous applications can help limit the number of inquiries and potential damage to credit scores before decisions are made about granting credit

Increasing Your Credit Limit

If you want to increase your credit score in 2023, one of the best strategies is to ask issuers to increase your credit limit on existing accounts.

This will positively affect your utilization rate as long as you keep your spending within a reasonable threshold. You should maintain a utilization rate below 30% of your total available credit limit.

This simple request can be made through an online portal or by calling customer service directly. You should explain why you are asking for a higher limit and provide evidence that indicates you can manage it responsibly.

The issuer may check your credit report before approving any changes, so make sure it reflects an excellent financial standing. Consider applying for an additional line of credit if there is room in your budget.

A new account can help reduce the debt on each other card and lower the total utilization across all accounts.

However, remember that having too many open lines of credit can bring down your score for different reasons, so be mindful when adding new lines of credit.

By increasing the amount of available credit and making payments on time, you should see positive results over time and reach the desired level of improvement for your score in 2023!

Key Points

  • Increasing credit limit on existing accounts can improve the utilization rate and credit score
  • Maintain a utilization rate below 30% of a total available credit limit
  • Request higher credit limit through the online portal or customer service, providing evidence of financial responsibility
  • An issuer may check the credit report before approving changes
  • Consider applying for an additional line of credit to lower debt on other cards and reduce total utilization
  • Having too many open lines of credit can lower your score, so be mindful when adding new lines
  • Making timely payments and increasing available credit can improve credit scores over time

Making Rent & Utility Payments Count

If you’re looking to build your credit score, one way to do so is to ensure that rent and utility payments are counted.

Unfortunately, not all credit scoring models consider these payments since this information is not typically included in credit reports.

However, if you need a credit history, services allow you to report on-time payments and build your credit score.

It allows rent payments to be reported under the tenant’s name and helps them build their credit score.

Additionally, Experian Boost is a free feature from one of the three major credit bureaus, allowing users to report their rent, utility and streaming service payments made from connected bank accounts.

This helps them boost their credit score without incurring any fees.

Even though these services exist and can help tenants increase their credit scores, they might still need to be at a disadvantage compared to those with more traditional forms of payment, such as credit cards or loans listed on their reports.

So it’s wise to use other strategies in addition to this one to increase your overall score in 2023.

Key Points

  • Rent and utility payments may not be included on credit reports but can be reported to build a credit score
  • Services such as Piñata and Experian Boost allow users to report on-time payments and boost credit score
  • Users may still be at a disadvantage compared to those with traditional forms of payment on their reports, so it may be wise to use other strategies in addition to this one to increase credit scores.

Inspecting Your Credit Reports

Checking your credit reports regularly is essential for monitoring your financial information’s accuracy and keeping your credit score in good shape.

By inspecting your credit reports, you can make sure all of the information about you is correctly listed and up to date. This includes accounts and balances, payment history, public records like tax liens or bankruptcies, and personal information such as name and address.

If you find an error on one of your credit reports, it’s crucial to dispute it immediately. Most minor errors can be quickly corrected by filing a dispute with the relevant bureau.

It’s also vital to stay on top of major changes like identity theft or fraud that could drag down your score significantly over time if left unchecked. Another benefit of inspecting your reports frequently is catching out-of-date information that may no longer be valid.

For example, if you successfully cleared a debt in total but the report still shows an outstanding balance, updating this information with the bureau can help boost your score.

To ensure all of the data included in your credit reports is accurate and up to date, it’s recommended that you review them at least once a year.

The three main U.S.-based credit bureaus—

are required by law to provide free copies of these reports upon request every 12 months from AnnualCreditReport.com. Alternatively, there are many reputable third-party services available online where you can access more detailed versions of your reports throughout the year for a fee.

Key Points

  • Check credit reports regularly to monitor the accuracy of financial information and keep credit scores in good shape
  • Look for and correct errors, dispute mistakes, and stay on top of significant changes like identity theft or fraud
  • Update out-of-date information, such as debts that have been paid in full, to improve credit score
  • Review credit reports at least once a year from AnnualCreditReport.com or a reputable third-party service for a fee
  • Credit reports can be obtained from three main U.S.-based credit bureaus: Equifax, Experian, and TransUnion

Conclusion

You can start by paying off any holiday debt, applying for credit responsibly, increasing your credit limit, making rent and utility payments count, and inspecting your credit reports.

These steps will help you build a more robust credit score and make accessing the best financial opportunities easier. So take the time to improve your credit score and prepare for a prosperous new year!

About Author

Dhiraj Jha
Dhiraj Jha
As a personal finance and credit cards expert, I provide valuable insights and advice on budgeting, saving, investing, and debt management. I am also an expert on credit card rewards programs and help readers make informed decisions about which cards are right for them. My goal is to help people improve their financial literacy and make better financial choices.

1 thought on “5 Easy Steps to Boost Your Credit Score in 2023”

  1. My husband and I have combined income of $150k in permanent part time and full time Positions. We have 2 dependants and would be first home buyers in NsW regional. My credit score is in the high 600 but his is in the mid 500 due to some late repayments over an 8 months period from
    October last year. We have paid the particular account out and closed it but the late repayments remain even after disputing them as we believed we were in an arrangement where they would not be reported as late. We want to buy at 120k and have 5% deposit plus about 5k extra to cover fees . The house requires my husband must have a good credit score of 650 upward every effort we made didn’t yield any result until we came across Tom whom many regarded as an expert in credit repair field on tom explained to him our problem and he promised us he’ll get it fixed in few days. To my greatest surprise he keep to his promise, my husband score increase from 500 to 780s we were able to purchase the house after his credit score met required standard

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