Tips to Improve Your Credit Score in the New Year

Young female excited while holding a credit card and laptop
Join our #CreditChat on Twitter on Wednesday, December 26th, at 3 p.m ET. This week, we’re talking about ways to improve your credit score in 2019

Topic: Tips to Improve Your Credit Score in the New Year     

When: December 26, 2018 at 3 p.m. ET. 

Easy ways to chat with us on Twitter: Tchat

The panel will include:  Rod Griffin: Director of Public Education at Experian; Beverly O’Shea: Staff Writer at NerdWallet; Andrea Woroch: Consumer Finance and Money Saving Expert; Gerri Detweiler: Credit Expert; and Robert Farrington: Founder of The College Investor. 

Questions We’ll Discuss:

  • Q1: What are the biggest factors that determine your credit score?
  • Q2: What’s the best way to maintain a good credit score?
  • Q3: What is debt consolidation, and how does it work?
  • Q4: Would a balance transfer affect my credit score?
  • Q5: What is the ideal credit utilization ratio?
  • Q6: How often should you review your credit card reports and statements?
  • Q7: I have a thin credit file. What does this mean?
  • Q8: How can you fatten up your thin credit file?
  • Q9: What are your financial goals and habits for the new year?
  • Q10: Any final tips to improving your credit score in the new year?

Tips to improve your credit score in the new year

By Patricia Guevarra

With 2019 just around the corner, we all want to start the new year off on the right foot, and our finances are a great place to start. This is the perfect time to review this past year’s goals and habits, create new ones and make sure your credit only gets better from here on out.

Improving your credit score can be tricky, especially if you have more debt than you intended to have Luckily, there are a multitude of available options to work your way around a less-than-perfect score. Keep in mind that the two biggest factors that determine your credit score are payment history and credit utilization, and these tips will become second nature to you.

Continue paying your bills on time
I say “continue” because I’m hoping this is something you’re already on top of. Delinquencies for late payments can stay on your credit report for up to . Even if you can’t pay as much as you’d like, always pay the minimum on your credit card bills to avoid a big hit on your score. This is probably the easiest thing you can do to maintain a good score.

Minimize your debt
It’s easier said than done, but with a well-thought-out repayment plan and a foolproof budget, minimizing your debt — no matter how large — isn’t as scary as it seems. Start by reviewing all your expenses and cutting out any unnecessary expenditures (looking at those monthly subscriptions you may not even use anymore is a good place to start). Figure out your source of income and whether or not you should consider a side hustle. Then get into the nitty-gritty stuff: figuring out your bills and how much you’d like to pay monthly. Keep in mind the other necessities you’ll need to buy, and don’t forget to budget for fun! It may take time, but if you’re serious about your debt, you’ll be debt-free soon enough.

A calculator between a stack of money and a click pen on top of notesPay attention to your utilization ratio and your credit age before opening or closing any credit cards
You hear a lot about how you shouldn’t open or close cards needlessly. That’s because doing so affects your credit age and your utilization ratio, which are huge factors in determining your credit score. Your credit age is the average age of all your accounts, and your utilization ratio is how much debt you owe compared to your limit across all your credit cards. Typically, experts recommend that you keep your utilization ratio at 30 percent or less, but it’s always smart to keep it as low as possible. If you close a card when you have a large amount of debt, the limit on that card is no longer included in your ratio, which can cause your utilization to skyrocket and your score to plummet. If you close a card that’s been open for a long time, you could lower the average age of your accounts. Either way, these things are good to keep in mind as you move forward into the new year.

Don’t ignore your credit card reports and statements
It’s important to constantly review your statements to make sure there are no inaccuracies. If you find any misreported items, report them immediately to make sure they don’t affect your credit score. This is also a good way to stay on top of any fraud or identity theft that could unfortunately occur.

Don’t let yourself be labeled “thin file”
These tips are all fine and dandy for people with a robust credit history, but what if you have less than four accounts on your credit report? Chances are you’re labeled thin file, which means you’ll have a much harder time being approved for a home or car loan — or even credit itself! At best, you may be able to access these but at a much higher interest rate than your counterparts with hefty credit files. Follow these tips to fatten up your credit file and boost your score.

Even if this year wasn’t your best, there’s a lot of time to improve your financial standing in the coming year. Learn more about boosting your score at our #CreditChat on PeriscopeYouTube Live, and Twitter every Wednesday at noon Pacific time, 3 p.m. Eastern time.


If you’ve never heard about #CreditChat, here is a brief overview:

Relevant chats on YouTube: