How to Make and Fulfill a New Year’s Resolution to Improve Your Credit in 2022

How to Make and Fulfill a New Year’s Resolution to Improve Your Credit in 2022

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Nearly 7 in 10 Americans are considering a financial resolution for 2022, according to a recent Fidelity study.

If you’re one of them, maybe you want to save more money, pay down debt, or spend less. Often, good finances and a good credit score tend to go hand in hand. So if your credit took a hit this year or it’s simply not where you want it to be, consider adding a goal of improving your credit score to your financial resolutions in 2022.

Having good credit gives you access to more loan and credit card options with more favorable terms, which allows you to save money over time. And good credit can help you in other ways — some rental companies may check your credit before approving your apartment application, for example, or your auto insurer may factor your credit into your insurance premium.

If you’re ready to better your credit, here are a few ways you can take action and begin to build good credit habits in 2022:


New Years Resolutions to Help Your Credit in 2022

Set a Budget

Budgeting is an essential tool for gaining control of your finances, and it can also help you improve your credit. When you stick to a budget, you may have more discipline to pay your bills on time and ensure you have enough to pay them in full. Falling behind on payments or paying a bill late are both ways you can hurt your score. You can also use your budget to allocate enough money each month to make progress on paying down any debt you already have, which could help your score.

Creating a budget starts with comparing your income and your monthly expenses. Once you understand the basics of your budget, you can figure out the right system or budgeting tool.

Make Payments On Time

Payment history, which includes paying your bills on time and not missing a payment, is the most important factor in your credit score — it makes up 35% of your FICO Score.

What’s more, paying your bills in full (which means not spending more than you can afford to pay down at the end of the month) can help you build credit while also avoiding high-interest debt. Paying your credit card bills in full and on time each month will help avoid costly fees and interest that can snowball over time when you carry balances month-to-month.

“Your payment history is the single biggest factor determining your credit score,” says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling (NFCC). “So if you’re focusing on that, you’re doing yourself a big favor.”

A smart way to avoid missing a loan or credit card payment is by putting your bills on autopay, so they’re automatically deducted from your linked account by the due date. Just make sure you have enough money in your bank account each month to cover each bill to avoid an overdraft.

Address Your Debt

After payment history, the second most important factor in your credit score is how much revolving debt you’re carrying compared with your total available credit, also known as your credit utilization ratio. Paying down balances consistently shows lenders that you’re able to borrow money and pay it back within a reasonable amount of time, without spending more than you can afford.


Experts recommended keeping this ratio at or below 30% to build and maintain your credit score, but below 10% can be even more impactful.

If you have debt, paying it off can help you build credit. Consider focusing on any high-interest credit card debt first, since that likely costs you more money in interest over time than, say, an auto loan or federal student loan does.

Using your budget, you can create a plan based on the full amount you owe, how much you can afford to put toward the debt, and when you want it paid off.

Consolidating your debut using a balance transfer card with a lengthy 0% intro APR period or a loan with a lower interest rate can help you save money and eliminate your debt faster.

Check Your Credit Regularly

Your three-digit credit score is determined by what’s on your credit report. In some cases, you could boost your credit score simply by catching and correcting an error on your credit report.

You’re usually entitled to one free credit report from the three credit bureaus each year on But in response to the COVID-19 pandemic, each of the three bureaus (Equifax, Experian, and TransUnion) have offered access to your report once a week, through April 2022.

While it’s smart to track your credit report for errors or instances of fraud, keeping tabs on your credit score is also important. When you monitor your credit score, you can address factors that influence it, such as high balances, late payments, or too many recent hard inquiries. You can typically check and monitor your credit score for free through your credit card issuer or bank.

How to Begin Building Credit

If you have bad or no credit history, there are a few things you can do to start building credit from scratch.

If you have a trusted loved one with good credit, consider asking if they would add you as an authorized user on their credit card account. This will give you access to your own card, which you can use to charge purchases and build credit history. However, the primary cardholder is ultimately responsible for making payments toward the card balance, which is why it’s important to make this type of agreement with someone who is financially responsible and pays their balance on time each month.

There are also financial products designed to help people begin building credit with little to no credit history, such as secured credit cards and cards with alternative approval requirements. For example, the Petal® 2 “Cash Back, No Fees” Visa® Credit Card uses factors outside of a traditional credit score to determine your eligibility — such as income, savings, and spending history using your bank account information. A secured card works similarly to a credit card, but you’ll be required to put down a refundable deposit when you open the account.

Consider also using tools like Experian Boost, TransUnion’s eCredable Lift, and FICO’s UltraFICO Score to better your credit score. When you opt-in, these services typically help boost your score by adding recurring, but not traditionally reported, payments to your credit report — such as utility payments or checking and savings account information.


Bottom Line

While these strategies will help kickstart your credit-building journey in 2022, remember: improving your credit takes time. A good credit score is the result of years of practicing good financial habits, such as paying your credit cards on time and in full and avoiding spending more than you can afford. Still, you can begin to implement these habits this year, so you can build and maintain a great credit score long-term.