15 Ways to Get Your Credit Back on Track in 2022

A good credit score helps you qualify for loans, secure a job, or get approved to live where you'd like.

Unfortunately, there are many ways you could end up with a score that's too low and that makes life harder.

The good news is, if you're not happy with the state of your credit, you can take some important steps to fix it in 2022. Just follow these 15 tips and you'll be well on your way to a better score this year.

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If you want to try to improve your credit, it's helpful to know your starting point and to monitor your progress. That means you should check your credit report and score both at the start of the year and at least once every few months.

You can access a free report from each of the major credit reporting agencies (Equifax, Experian, and TransUnion) at AnnualCreditReport.com.

Many other websites also allow you regular access to your score and report at no cost to you. Find one that works for you so you can check on your credit score regularly.

Errors on your credit report could reduce your score and make it harder for you to make progress on improving it.

If there is inaccurate information on your report, dispute it so you can remove the unjustified black marks from your report. Equifax, Experian, and TransUnion all make it easy to dispute errors online.

Even a single late payment on your credit report can drag your score down.

If you've made mistakes in the past, write a goodwill letter to creditors asking if they'd be willing to remove the black mark from your credit report.

It's common for credit card companies to help out good customers by agreeing not to continue reporting an old late payment when the customer has virtually always been current or when they've caught up on bills that were past due.

Owing too much money can actually hurt your credit score. Your credit record is more attractive to lenders if you've used 30% or less of the credit available to you.

If you have large credit balances, work on paying off what you owe ASAP. This will help improve your credit, and you can also save on interest and use your money for better goals such as investing your money rather than lining your creditors' pockets.

ALSO READ: Start Investing or Pay Off Debt? 5 Times Debt Can Wait

A budget is actually crucial to helping you improve your credit.

When you budget your money, you can avoid relying too much on your credit cards and potentially running up a large balance that you can't pay back. You can also make sure you have the cash to pay your credit cards in full when the bill is due.

There are different ways to budget, so find one that works for you if you're serious about improving your credit this year.

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As mentioned previously, using more than 30% of your available balance can hurt your credit score.

So if you haven't already run up debt that you need to pay down, you'll want to be careful about how much of your available credit you use this year.

If you have a card with $1,000 available on it, try not to charge more than $300. Your credit utilization ratio is the second most important factor that determines your score after your payment history. So limiting what you charge is really important if you're hoping to get back on track with your credit in 2022.

ALSO READ: What Is a Credit Utilization Ratio?

You may assume that if you pay down your balance when you get your bill, you'll have a good credit utilization ratio. But that's not necessarily the case.

A lot depends upon when your credit card company reports your balance to the credit reporting agencies. If you charge $900 on a card with a $1,000 limit and your creditor reports this $900 balance on the ninth of the month before you pay your card in full on the 10th, your credit utilization ratio could be very high and your credit score could be hurt.

Find out when your card company reports your balance and try to make sure your card is paid off -- or paid down as much as possible -- before that date.

The mix of different kinds of credit you have is an important factor in determining your credit score. If you only have credit cards and no installment loans (such as a car loan, mortgage, or personal loan), then your score is likely to be lower.

While you don't want to borrow a lot just to increase your credit score, you may wish to consider taking out a small car loan next time you buy a vehicle and paying it off ASAP. Or think about funding a big purchase with a personal loan instead of a card so you can improve your credit mix.

If your credit score is really low, it may be hard for you to get approved for a credit card or loan.

Unfortunately, without being able to borrow, it's really difficult to establish a positive credit history since you won't have a chance to show you can be responsible with payments.

A secured card could be the solution. You have to put down collateral (a cash deposit equal to your credit line), but virtually everyone can get approved for one.

If you're building credit from scratch or repairing a very low score, look into secured cards in 2022. You can open an account in one, charge a small amount each month, and pay on time to establish a positive credit record.

Although it's good to have a mix of different kinds of credit, you don't want to open too many new accounts at one time.

When you apply for credit, you get an inquiry on your credit report. It stays on your report for two years. Having too many inquiries at a time lowers your score. So try to avoid taking on a lot of new debt at once.

Average age of credit is also a factor when lenders consider your credit record. Opening many new accounts lowers that average age, which results in a reduced credit score.

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Many credit card companies will give you a larger credit limit if you've been a good customer and you ask for one. Usually, you don't need a new credit check to get a higher line of credit. That means you'll avoid an inquiry.

A larger credit line helps you achieve a lower utilization ratio, which as mentioned previously can improve your score. So ask your creditors to extend you more credit as part of your efforts to improve your record in 2022.

ALSO READ: How to Increase Your Credit Limit

You can benefit from other people's responsible borrowing behavior if they're willing to add you as an authorized user to one or more of their accounts.

If you're an authorized user, the record from the account shows up on your credit report. You could benefit from a positive payment history and a low utilization ratio. This could also help you get a longer account history if the account you are added to is an older one.

Payment history is the most important factor in your credit score, so paying on time every time is crucial if you're hoping to get your credit back on track.

Setting up automatic payments ensures you won't miss one by mistake, so set this up through your bank or credit card company ASAP.

Closing old accounts can hurt both your average account age, by lowering it, and your credit utilization ratio, by taking away some of your available credit.

While it may seem smart to close down old accounts when trying to get your credit back on track, avoid this temptation and leave them open instead.

Finally, you'll want to get credit for all of your responsible behavior, such as paying utility bills on time.

Services such as Experian Boost can ensure that more types of information about your payment track record are included on your credit report, which can help to increase your score.

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Taking any or all of these 15 steps can make a big difference in your credit record and your credit score.

Get started working on them ASAP because your credit history has a profound impact on every aspect of your financial life.

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