New Year’s Resolutions to Help Your Credit in 2022


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Nearly 7 in 10 Americans are considering a financial resolution by 2022, according to a recent Fidelity study.

If you’re one of them, you might want to save more money, pay off debt, or spend less. Often, good finances and a good credit rating go hand in hand. So if your credit has taken a hit this year, or it’s just not where you want it to be, consider adding a goal of improving your credit score to your financial resolutions in 2022.

Having good credit gives you access to more loan and credit card options on better terms, saving you money over time. And good credit can help you in other ways – some rental companies may check your credit before approving your apartment application, for example, or your auto insurer may include your credit in your insurance premium.

If you’re ready to improve your credit, here are some ways you can take action and start building good credit habits in 2022:

New Year’s Resolutions to Help Your Credit in 2022

Establish a budget

Budgeting is an essential tool for taking control of your finances, and it can also help you improve your credit. When you stay on a budget, you can have more discipline to pay your bills on time and make sure you have enough to pay them in full. Falling behind on payments or paying a late bill are two ways to hurt your score. You can also use your budget to allocate enough money each month to progress toward paying off any debt you already have, which could improve your score.

Creating a budget starts with comparing your monthly income and expenses. Once you understand the basics of your budget, you can find the right budgeting system or tool.

Make payments on time

Payment history, which includes paying your bills on time and not missing a payment, is the most important factor in your credit score – it makes up 35% of your FICO score.

Plus, paying your bills in full (that is, spending no more than what you can afford to pay off at the end of the month) can help you build credit while avoiding low-interest debt. high interest. Paying your credit card bills in full and on time each month will help you avoid expensive fees and interest that can snowball over time when you carry balances from month to month.

“Your payment history is the most important factor in determining your credit score,” says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling (NFCC). “So if you focus on that, you are doing yourself a great service. “

A smart way to avoid missing a loan or credit card payment is to set your bills to auto-pay, so that they’re automatically deducted from your linked account on the due date. Just make sure you have enough money in your bank account each month to cover each bill to avoid an overdraft.

Fix your debt

After payment history, the second most important factor in your credit rating is the amount of revolving debt you carry relative to your total available credit, also known as the credit utilization rate. Paying off balances consistently shows lenders that you can borrow money and pay it back on time, without spending more than you can afford.

Pro tip

Take advantage of credit counseling to increase your credit score. This is a free or low-cost service offered by nonprofit organizations that can help you create or revise your budget, recommend ways to prioritize debt repayments, or point you towards a plan. debt management. You can find an accredited credit counseling agency through the CNFC and the Financial Advisory Association of America.

Experts have recommended keeping this ratio at or below 30% to establish and maintain your credit score, but a rate below 10% can be even more effective.

If you have debt, paying it off can help build credit. Consider focusing on any high interest credit card debt first, as it will likely cost you more money in interest over time than, say, a car loan or federal student loan.

Using your budget, you can create a plan based on the total amount you owe, how much you can afford to pay for the debt, and when you want it paid off.

Consolidating your start by using a balance transfer card with a 0% APR long introductory period or a loan with a lower interest rate can help you save money and get rid of debt faster.

Check your credit regularly

Your three-digit credit score is determined by what is on your credit report. In some cases, you can increase your credit score simply by detecting and correcting an error in your credit report.

You are generally entitled to a free credit report from the three credit bureaus each year on AnnualCreditReport.com. But in response to the COVID-19 pandemic, each of the three offices (Equifax, Experian, and TransUnion) offered access to your report once a week, until April 2022.

While it’s a good idea to track your credit report for errors or instances of fraud, it’s also important to keep an eye on your credit score. When monitoring your credit score, you may want to consider factors that influence it, such as high balances, late payments, or too many recent inquiries. You can usually check and monitor your credit score for free through your credit card issuer or bank.

How to start building credit

If you have a bad or no credit history, there are a few things you can do to start building credit from scratch.

If you have a trusted loved one with good credit, consider asking them if they would add you as an authorized user on their credit card account. This will give you access to your own card, which you can use to charge for purchases and establish a credit history. However, the primary cardholder is ultimately responsible for paying the balance on the card, which is why it is important to make this type of agreement with someone who is financially responsible and pays their balance on time each month. .

There are also financial products designed to help people start building credit with little or no credit history, such as secured credit cards and cards with alternative approval requirements. For example, the Visa® Petal® 2 “Cash Back, No Fee” credit card uses factors other than a traditional credit score to determine your eligibility, such as income, savings and spending history. using your bank account information. A secure card works the same as a credit card, but you will need to make a refundable deposit when you open the account.

Also, consider using tools like Experian Boost, TransUnion’s eCredable Lift, and FICO’s UltraFICO Score to improve your credit score. When you sign up, these services usually help boost your score by adding recurring, but not traditionally reported, payments to your credit report, such as utility payments or checking and savings account information.

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While these strategies will help get you started on your credit building journey in 2022, remember: Improving your credit takes time. A good credit score is the result of years of practicing good financial habits, such as paying off your credit cards on time and in full and avoiding spending more than you can afford. Nonetheless, you can start implementing these habits this year, so that you can build and maintain a great credit rating over the long term.


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