Do you want better credit in 2023? Take these 5 steps now

If you want a better credit score in 2023, you need to read this.

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Key points

• Your credit score has a big impact on many aspects of your financial life.
• For example, having a higher credit score can make loans cheaper.
• There are steps you can take to improve your credit, such as paying down debt and deciding carefully how and when to apply for new credit.

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A good credit score it is an extremely valuable asset.

When you have good credit, you can rent an apartment in a good area without a large security deposit or qualify for a mortgage to buy a house. You can also get a cell phone or sign up for utilities without putting up a ton of money, pay less for auto insurance, and otherwise borrow money at affordable rates. And this is just a small sample of the benefits that come with a good credit score.

Unfortunately, not everyone has a credit score that opens doors for them. If you’re not happy with your score, there are a few steps you can take to get better credit in 2023. Here are five of them.

1. Take a close look at your credit report

Taking a look at your credit report is a crucial first step in improving your credit in the new year. By reviewing your report, you can identify exactly what is causing your score to be lower than it should be. That can help you make an action plan.

For example, if the problem is high debt balances, you’ll need to follow a different process to improve your credit than if the problem is incorrect information or late payments.

Be on the lookout for any negative information that you can remove if it’s on your report in error, or that creditors might be willing to remove for you if you can come to an agreement with them.

2. File a dispute to correct any errors

If you found inaccurate information on your credit report, you’ll need to dispute the details with each of the three major credit bureaus. With a few simple steps to removing inaccurate informationyou can quickly and easily increase your score.

However, please do not attempt to dispute accurate negative information, as the credit bureaus will investigate and if they find the negative details to be accurate, they will not be removed.

3. Ask for increases in the credit line

The amount of credit used, compared to available credit, is one of the most important factors affecting your score. If you can get creditors to increase your credit limits, this will instantly lower your credit utilization ratio and improve your score. Credit card companies are generally willing to do this periodically for responsible borrowers, even without a credit check.

4. Make a plan to pay off the debt

You can also lower your credit utilization ratio pay the debt. While this requires more effort than just getting a credit line increase, paying off high-interest loans is a good idea to improve your overall financial life anyway. Plus, many lenders look at not only your credit but also your outstanding debt when deciding whether to give you a loan, so paying off debt can help you qualify for cheaper future loans for this reason as well.

5. Decide if you should apply for new cards or loans

If your credit score is lower than you would prefer because you don’t have a long payment history or because you don’t have a mixed mix of different types of loans, then opening new cards or accepting new installment loans might help. improve your score. That’s because you need to show that you can be responsible with different types of debt.

Your own specific credit history will determine which of these five steps might help you the most, but it’s worth a try if your goal is to have better credit in 2023.