13% of Americans Pledge to Improve Their Credit in 2022. Here's How to Do the Same

A higher credit score could be yours if you make these smart moves.

You may not think much about your credit score until the time comes to apply for a mortgage or get a loan for another purpose. But the higher your credit score, the more options you'll have for not only getting approved as a borrower, but snagging a competitive interest rate on whatever loan you take out. A higher credit score could also be your key to snagging some attractive credit card offers.

In a recent Principal survey, 13.2% of Americans say one of their pledges for the new year is helping their credit scores improve. Here's how you can make the same thing happen for yours.

1. Pay all bills on time

Your payment history is the single most important factor that goes into calculating your credit score. Being timely with bills could be your ticket to raising that number.

A good way to ensure you're paying on time is to automate as many payments as you can. And if you're carrying balances on multiple credit cards, consider consolidating that debt with a balance transfer. In doing so, you might make it more affordable to pay off, but also, you'll go from having to keep track of several payments to just one payment every month.

2. Pay down some of your credit card debt

Certain types of debt will affect your credit score more than others. Carrying a mortgage – even a large one – can actually help your credit score if you make your home loan payments on time. But carrying a high credit card balance can have the opposite effect.

Once your credit utilization ratio gets above 30%, your credit score has the potential to drop. That ratio measures the amount of available revolving credit you're using at once. If you owe $4,000 across your credit cards and your total spending limit on those cards is $10,000, that's a utilization ratio that could damage your score, so cutting that balance in half could help your score improve.

Of course, if you can't pay off credit card debt, there's another option for lowering your utilization – get a credit limit increase. But this tactic isn't guaranteed to work, because your credit card issuers may not agree to it. And besides, paying off credit card debt is a good move for your finances, not just your credit score, as it could save you a lot of money on interest.

3. Check your credit report and correct errors you spot

The credit bureaus that gather information on you aren't infallible. Credit report errors are actually quite common, and some mistakes could be dragging your score down. For example, if you're listed as being delinquent on a debt that was never yours to begin with, but rather, belonged to someone with the same name but a different Social Security number.

It's a good idea to check your credit report once every three months. If you spot errors, work to have them fixed. In fact, credit reports will be free on a weekly basis through April 2022, so you have plenty of opportunity to access yours.

A higher credit score could work wonders for your general financial picture and help you meet near-term goals. These moves could help your credit score improve well before 2022 comes to an end.