Credit scores are a vital part of our financial lives, impacting everything from the interest rates we pay on loans to our ability to rent an apartment. In this post, we will explore effective strategies to boost your credit score in 2023.

1. Resume Paying Federal Student Loans

Since March 2020, federal student loan borrowers have not had to make monthly payments due to the forbearance period. However, this is set to end in summer 2023. Ensure you’re prepared for payments to resume to protect your credit score.

2. Set Up Automatic Bill Payments

Avoid missing a monthly loan or credit card payment by setting up automatic bill payments. This will help maintain a good payment history, a crucial factor in your credit score.

3. Pay Down Balances

The second most important component in your credit score is your credit utilization. Make it a goal to reduce any high-interest credit card debt first. Experts suggest keeping your credit utilization below 30% of your credit limit at all times.

4. Handle Debt in Collections

If you currently have an unpaid debt that’s gone to collections, consider negotiating it down or disputing the debt if you believe it’s an error. Ignoring the debt could lead to wrecked credit and potentially a lawsuit.

5. Get a Credit-Builder Loan

A credit-builder loan from a credit union could help you build credit from scratch or recover after a hit to your score. The lender will report your on-time payments to the credit bureaus, which could strengthen your score.

6. Seek Out a Secured Credit Card

A secured credit card requires a cash deposit, which becomes your credit limit. If you use a secured card responsibly, your card issuer could upgrade you to a traditional unsecured card in the future.

7. Join an Account as an Authorized User

Joining a trusted family member’s or friend’s credit card account as an authorized user can also improve credit. The card’s payment history will show up on your credit report, potentially boosting your score.

8. Dispute Credit Report Inaccuracies

Check your credit report from each of the three main credit bureaus at annualcreditreport.com. If you find something that shouldn’t be there, file a dispute with the appropriate bureau.

9. Get Credit for Monthly Bill Payments

Experian Boost® lets you add eligible on-time phone, utility, and streaming payments to your credit report, which may cause your FICO® score to rise.

10. Keep Old Accounts Open

Even if you no longer use an old credit card, it’s typically best to keep the account open. Closing established accounts will shorten the average age of your accounts and lower your total credit limit.

Remember, improving credit isn’t an immediate process. It’s the result of years of conscientious financial behavior. Commit to doing your best in 2023, and avoid moves that could jeopardize your credit score. With patience and persistence, you can boost your credit score and improve your financial health.