Credit Sesame’s list of credit building resolutions for 2023. Make this the year of credit improvement.
Changing your financial outlook takes vision, effort and persistence. It’s also easier than you might think. Whether you are saving up for a big purchase, planning a move or investing in your future self, the start of 2023 is a great time to build your credit.
If you’re worried that credit building takes years of juggling multiple activities to earn that coveted high score, take a deep breath. Although it’s true a strong credit report blossoms over years, there are small things you can do to nudge it in the right direction.
Read on to discover 10 easy credit building resolutions. Act on these right away using simple tools and information you can find readily online.
1. Unlock the power of your free credit report
To take your first step, download the free Credit Sesame app. You’ll get full access to your credit report summary and credit score plus lots of educational information to help you learn about credit and improve money management. It’s a no-cost opportunity to benchmark your existing credit habits.
2. Study your credit score for growth opportunities
Your credit score changes to reflect your money management habits over time. The majority of people have a score they can improve. Check out free resources about how to increase your credit score and how to build credit quickly. Your score reflects many things you can control, such as credit mix, payment history and available credit, among other factors. For example, you could pay your bills on time more often (see credit building resolution #4 below), add a credit card (see credit building resolution #6) and so on. These factors can work together to lift your score.
3. Report any errors to clear your good name
Many credit reports contain errors. The three credit reporting bureaus – Equifax, Experian and TransUnion – each gather your data differently. Much of it will be accurate, but occasionally some is incorrect. This happens by accident and, sometimes, because someone has committed fraud to take out credit in your name. Use the Credit Sesame app to keep apprised of your credit report. If needed, you can dispute false information on your report.
4. Pay your monthly bills on time (and in full, if possible)
Reliability translates to stronger credit. Become dependable at paying your bills. If you have credit cards, try paying the balance each month. This shows credit-giving institutions such as banks and car dealers you are capable of using available credit wisely. It also increases the odds of accessing credit in the future.
5. Use available credit without hitting the max
Show your financial chops when it comes to managing the credit available to you. Don’t max out all of your accounts. Instead, dial in your spending in 2023 to use a portion of available credit without exhausting all of it. This shows you know your limits – and live by them.
6. Evaluate your credit mix
The more types of credit you use, the more likely you are to have healthier credit. If you only have a credit card, consider whether a manageable auto loan or a student loan might work to your advantage. Remember not to open too many accounts, though, which can be a red flag to lenders. Multiple credit accounts demonstrate your ability to make fixed or variable payments, month after month. This can elevate your credit strength and credit score.
7. Consider programs that factor your utility bills
Existing programs such as Experian Boost and emerging programs from new financial service providers let you tack utility bill payments onto your credit report. If you don’t have much of a credit history, or you’re trying to use credit conservatively, this type of arrangement can be beneficial. It builds your credit because it adds a new type of activity to your report: money you spend on services other than debt repayment.
8. Consider cosigning opportunities
If you hope to build credit with a new credit card, student loan or other credit product, consider whether cosigning could help. For example, if you are a student, you might cosign on a loan with a parent to get a larger loan or lower interest rates. This arrangement can give lenders greater confidence in your ability to pay. Keep in mind that if you are unable to make payments, your cosigner will be responsible for covering those costs. Always evaluate cosigning opportunities thoroughly to ensure it’s a good fit for both parties.
9. Take a free financial management course
Several online learning platforms offer no-cost content that can boost your credit-building knowledge. There’s never been a better time to access smart, fun and profitable (literally!) training. Examples include:
- Alison’s Introduction to Managing Your Personal Finance Debts – Revised
- Udemy’s Personal Finance 101: Everything You Need to Know
- Skillshare’s My Financial Mountain: Understanding Your Path to a Solid Financial Foundation
- Coursera’s Create A Budget With Google Sheets
- Marginal Revolution University’s Money Skills
10. Check your credit report regularly to measure progress
The best way to build your credit in 2023? One step at a time. Review your credit report at least once a month. See how your credit score is doing. Read up on a few helpful articles about money management and credit building. With the free Credit Sesame app, you can review your full report as often as you like. Get into the habit of reviewing your data and celebrating your progress. This will keep your mental batteries energized and motivated to keep going.
If you enjoyed Ten Credit Building Resolutions for 2023, you may like:
- Ten New Year Money Management Resolutions for 2023
- Ways to Build Credit and Create Good Credit Habits
- Sesame Cash Credit Builder
- Ten Ways to Build Credit on a Budget
Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.