5 Ways to Boost Your Credit Score Before We Ring in 2024

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Your credit score has a huge effect on your finances. Here are five moves you can make right now to start improving yours for 2024. 

Vowing to get better with money is one of the most common New Year’s resolutions. This can include many things, from saving more money to learning how to invest. You may also want to boost your credit score, so you can qualify for better credit cards and lower interest rates on loans in the future.

But there’s no need to wait until 2024 to start working toward that goal. In fact, why not take steps to raise your credit score right now so you can start next year off strong? Here are five things you can do that could boost your credit score by the end of 2023.

1. Pay off debt

One of the most important factors in your credit score calculation is your credit utilization ratio. This is the ratio between the amount of credit you have available to you and the amount you use every month. For example, if you have a card with a $10,000 limit and you regularly charge $3,000 to that card, your credit utilization ratio would be 30%. Ideally, you don’t want to exceed that ratio if you hope to keep your credit score high.

This is a big problem for those with credit card debt, as they often have high utilization ratios. That can provide yet another incentive for trying to get out of credit card debt, but it’s often easier said than done.

You can try opening a balance transfer card. These cards have 0% introductory annual percentage rates (APRs), so your balance won’t grow during this time. That can help you pay down what you owe, though there’s usually a one-time fee (often 3% to 5%) associated with these transfers.

You could also opt for a personal loan. This can get you out of the cycle of credit card debt by giving you a predictable monthly payment. Interest rates are generally better than what you find on credit cards, but they can still be pretty high since these loans don’t have collateral. That’s especially true for those with poor credit.

2. Increase your available credit

An alternate way to reduce your credit utilization ratio is to gain access to more credit. You can do this by requesting a credit limit increase on your existing cards or opening a new credit card.

But it’s important to be realistic about whether you’re likely to get approved before you do this. Credit card companies often do a hard inquiry on your report before approving you for additional credit, and this reduces your score by a few points. If your request is denied, you may have just hurt your score rather than helping it.

It’s typically not a good idea to request a credit limit increase if your credit is currently poor, you’ve made several late payments, or you’ve recently requested a credit limit increase or opened a new card. These factors make you less likely to be approved.

But if none of these conditions apply, it might be worth a shot. Most credit card issuers enable you to request credit limit increases or apply for new cards online. You typically need to provide them with an estimate of your annual income. A higher annual income usually leads to a larger credit limit because lenders are more confident that you’ll have the money coming in to pay back bigger sums.

3. Become an authorized user on someone else’s credit card

When neither of the above options work, you might try becoming an authorized user on someone else’s credit card. This gives you the right to charge things to this card and it adds the card to your credit report. Good payment behavior and a low credit utilization ratio on this card could help boost your credit score over time.

But you should note that if the person who owns the card makes late payments or regularly maxes out the card, it could come back to bite you. That’s why you need to carefully choose the person whose account you want to join.

You should also be prepared to have discussions about restrictions on how you’ll use the card. And you may have to accept the fact that the person doesn’t want to share access to their credit line with anyone else.

4. Try a secured credit card

Opening a secured credit card is a good fit for those who have poor credit and aren’t able to open many other credit cards because of it. Secured credit cards require you to put down a security deposit, which is refundable when you close the account assuming you’ve made all your payments. These cards typically have annual fees and most don’t have rewards.

They do report your payments to the credit bureaus, though. And they accept people with all credit backgrounds. As long as you make regular, on-time payments, this can help boost your credit score over time.

5. Dispute errors in your credit report

Everyone is legally allowed to view their credit reports for free annually through AnnualCreditReport.com. And you can actually view your reports weekly for free through the end of 2023. It’s a good idea to check these at least once per year to make sure all the information on them is accurate. Errors, like fraudulent accounts in your name or closed accounts reported as open, while uncommon, can hurt your credit score.

If you notice any inaccurate information, contact the credit bureau and the financial institution associated with the account immediately. The credit bureau will launch an investigation. It may take some time, but if it finds your claim is valid, it will update your credit report and your credit score will get a boost.

These moves may not boost your credit score overnight, and you may need to continue these actions as well as strive to make consistent, on-time payments in 2024. But if you stick with them, you should start to notice your score rising within a few months.

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