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15 Ways to Raise Your Credit Score Before 2022

Author: Kailey Hagen | November 27, 2021

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Ready to fix your credit?

Remember back in January when you made that resolution to work on improving your credit score? Oh yeah, that. With the holidays fast approaching, you might think there's not much you can do for your credit before 2022, but you'd be surprised.

Rather than waiting to try again next year, why don't you use the following tips to start boosting your credit right now?

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1. Check your credit report

A good first step is to check your credit report. You can access it for free through AnnualCreditReport.com. Normally, you only get one credit report per year for free, but because of the COVID-19 pandemic, the credit bureaus are offering free weekly credit reports.

Look yours over and identify any factors that might be affecting your credit score. This will give you a good idea of which steps will help boost your score the most.

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2. Dispute any errors in your credit report

If you notice any accounts you don't recognize in your credit report or any information that seems inaccurate, reach out to the credit bureau and the financial institution associated with the account in question. You may have been the victim of identity theft or there could've just been a clerical error. Either way, credit report errors can unfairly damage your score, so you'll want them resolved as quickly as possible.

Once you've disputed a credit report error, the credit bureau will conduct an investigation and will correct the information in your report if it finds your dispute is valid. This can take some time, though, which is why it's best to start this process right away.

ALSO READ: 8 Common Errors That Could Be on Your Credit Report

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3. Pay all your bills on time

Payment history is the single most important factor in determining your credit score, so on-time payments are crucial for keeping your score high. Being a day or two late once in a while may not cost you, but if you're 30 or more days late, you can expect your credit score to take a huge hit.

Set up automatic bill payments if you're prone to forgetting or make yourself a note. Over time, this will become a habit.

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4. Pay off your debt

If you're carrying credit card debt around, make paying it off your top priority. Credit card debt is not only expensive, it also tends to raise your credit utilization ratio. This is the ratio between how much credit you use each month and how much you have available to you. For example, if you have a $2,000 balance on a card with a $10,000 limit one month, your credit utilization ratio for that card is 20%.

You should aim to keep your credit utilization ratio under 30% if you want to keep your credit score high. This goes for your per-card ratio and your overall credit utilization ratio. Paying off your debt using a balance transfer card or a personal loan will help your credit score.

ALSO READ: How Much Available Credit Should I Have?

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5. Limit how much you charge to your card each month

Pay attention to how much you're charging to your credit cards each month and avoid spending more than 30% of your credit limit whenever possible. The lower, the better, as long as you're still using some of it. This shows the credit bureaus you know how to handle credit responsibly.

If you avoid using credit altogether, the credit bureaus won't have any idea how you handle borrowed money and this could actually work against you.

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6. Pay your credit card bill twice per month

If you habitually spend more than 30% of your credit limit, another way to avoid a high credit utilization ratio is to pay your bill off twice per month. The credit card companies only report your balance to the credit bureaus once per month. If you pay the balance off halfway through the month and again at the end, it will appear to the credit bureaus as if you only spent half as much as you actually did.

Check with your credit card issuer to find out when it submits your payment information to the credit bureaus so you know when the halfway point is between billing cycles.

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7. Apply for a credit limit increase

Another way to lower your credit utilization ratio is to increase your monthly credit limit. You can do this by reaching out to the credit card company and requesting it raise your credit limit. But you should know it doesn't have to comply and it will run a hard credit check that could drop your score a few points.

If you're approved for the credit limit increase, this drop shouldn't matter because a lower credit utilization ratio will help you more than the hard credit check hurts you. But if you're denied for the credit limit increase, you may have just hurt yourself for no reason. So make sure you feel confident that you'll get approved before applying for one.

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8. Open a new credit card

You could also try to open a new credit card to lower your credit utilization ratio rather than requesting a credit limit increase on your existing cards. But the same concerns apply. You should only do so if you feel pretty confident that you'll be approved or else you'll hurt your score instead of helping it.

Think about the cards you already have in your wallet and try to find something that complements them. If you don't have a card that rewards you for gas purchases, for example, you may want to look for one of these. Try to find one that you'll use routinely.

ALSO READ: How to Choose the Right Credit Card for You in 4 Steps

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9. Consider a secured credit card

If you don't think you'll be approved for any credit card due to your poor credit, look into a secured credit card. These are specifically designed to help you build credit and just about anyone can get one. But there are a few rules you should be aware of.

You usually have to put down a security deposit of a few hundred dollars. This is equal to your credit limit, and if you fail to pay back what you borrow, the card issuer keeps your security deposit. Otherwise, you get it back when you close the card. You could also face fees, but if you make regular, on-time payments and limit your monthly spending, this can help improve your score over time.

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10. Become an authorized user on someone else's credit card

If a secured credit card isn't a good fit for you, you might consider becoming an authorized user on someone else's credit card instead. This is where the card owner grants you permission to use it, and this card also shows up on your credit report.

As long as the bill is paid on time and the credit utilization ratio isn't too high, this can help your credit score. But if the cardholder is irresponsible or if you irresponsibly use their card, this strategy could come back to bite you.

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11. Add to your credit mix

Credit mix is another factor that affects your credit score, though it's not as significant as your payment history or credit utilization ratio. Simply put, your credit score will go up if you can prove that you can handle different types of credit. Credit cards are considered revolving debt because the balance changes every month, but there's also installment debt, which has a predictable monthly payment. Mortgages, car payments, and personal loans are all types of installment debt.

It may not be worth taking out a loan if you don't need one, but if you're thinking about borrowing money, you should know that a responsible payment history could help your credit score. There are even credit builder loans, which are specifically designed to help people improve their credit score and add to their credit mix.

ALSO READ: The 3 Types of Credit and Why You May Want All of Them

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12. Get credit for your rent and utility payments

See if your landlord or utility company is willing to report your payments to the credit bureaus. Not all of them do this automatically, but it might be an option for those who ask.

If you demonstrate a responsible payment history on these bills, it can help your credit score in the same way that on-time credit card payments can help you.

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13. Be careful about how often you apply for new credit

While adding new credit accounts can be beneficial to your credit score, they could also hurt you in some situations. Every time you apply for a loan or credit card, the lender does a hard credit check on your report. This drops your score a few points. This can be concerning, especially for those who like to shop around before committing to a lender.

Fortunately, the credit bureaus usually consider any inquiries that take place within a 30-day period to be a single inquiry. That means, you can shop around for new credit without worrying about it damaging your score, but you should make sure to get all your applications in within about a month of one another. Then, try to avoid applying for new credit again for at least six months.

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14. Keep your old credit cards open

You might think about canceling some of your credit cards if you're no longer using them, but this is usually a bad idea. Closing your credit card means you no longer have access to its credit limit, and this can increase your credit utilization ratio.

It's usually best to leave unused cards open, unless they charge an annual fee. In that case, you may want to accept the short-term hit to your credit score. Just try to avoid closing more than one card every six months.

ALSO READ: How to Close a Credit Card Without Hurting Your Credit Score

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15. Keep at it

Your credit score is meant to provide lenders with a long-term look at how you handle borrowed money. Its scoring model is devised so that it doesn't fluctuate wildly over time. It takes consistently good habits to see a major change to your credit score.

That doesn't mean you can't make a difference before the end of the year, though. Some of the steps discussed here can have a noticeable effect on your credit score in a short time. But for those trying to improve their credit score by 100 or more points, it might take a little longer.

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Make good use of the time you have left

There are just a few more weeks left until 2022, but that still leaves you some time to put the tips discussed here into practice. Review this list and pick out a handful of strategies that you think make the most sense for you and then give them a try. Hopefully, by the new year, you'll already be seeing some progress.

The Motley Fool has a disclosure policy.

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