Inflationary prices and rising interest rates from the previous year intensified pressure on households. However, improving your credit can help you minimize your borrowing costs. Your credit score can play a big role in whether you’ll be able to achieve your goals in 2023, whether you’re feeling optimistic or apprehensive about your finances.
Here are 5 strategies to improve your credit in 2023 if you’re prepared to commit to doing so.
1. Pay down your debt
Your credit utilization is the second most important factor in determining your credit score. Set a plan to pay off any high-interest credit card debt first because it probably carries a higher interest rate than, example, an auto loan or a federal school loan.
Your ability to manage credit is further demonstrated by decreasing your credit card balances to prospective lenders. According to experts, you should always maintain your credit use below 30% of your credit limit.
2. Open a Credit Builder Loan
Your money will be kept in a savings account that you can retrieve at the conclusion of the loan term while you make fixed payments for a period of six to 24 months. In the interim, the lender will notify the credit bureaus of your timely payments, potentially improving your score.
3. Sign up as an Authorized User for an Account
You can also increase your credit score by becoming an authorized user on a friend’s or family member’s credit card. The card will allow you to make purchases, and your credit report will reflect the card’s payment history. Selecting a person whose credit you will profit from is vital because of this.
4. Try to find a secured credit card
Obtaining a secured credit card is another strategy for improving credit. It takes a cash deposit that becomes your credit limit, usually approximately $200. (you may be able to provide a larger deposit for a higher credit line). The deposit shields the credit card’s issuer from the potential that you won’t pay off your debt, allowing you to use the card as you normally would.
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5. Dispute Credit Report Inaccuracies
The three major credit bureaus each offer a free credit report, which you may obtain from AnnualCreditReport.com. Check each one thoroughly, and if you discover anything on your report that doesn’t seem right, like an improperly reported late payment, submit a dispute with the relevant bureau. You can also alert the proper loan or credit card provider of the issue, who may subsequently correct the data with the bureaus.
If you need our help to fix your credit, do not hesitate to book a consultation with our credit experts.