According to Experian, 23% of Americans have FICO scores of 800 or higher. For the majority of people, they have good or very good credit scores, while approximately 30% have fair or poor scores. This means that a good portion of the population struggles with life milestones, as less-than-excellent credit scores can create obstacles.
Fortunately, there are ways to strengthen your credit and open new doors of opportunity. Here are four ways you can increase your credit score this year.
1. Automate On-Time Payments
Payment history is the biggest factor in most credit scoring models, so consistency is one of the most effective ways to strengthen your credit. By setting up automatic payments for at least the minimum amount due, you can avoid:
- Late fees
- Penalty APRs
- Negative marks on your report
Just one missed payment can stay on your credit report for years, so automation creates a very useful safety net.
If you’d like more control, then schedule reminders a few days before each due date and manually pay the balance in full when possible.
2. Consider a Starter or Credit-Builder Credit Card
If you’re newer to credit or are rebuilding it after past issues, then a starter credit card or credit-builder card like the 118118 credit card can help establish positive activity.
The key is to use it strategically rather than spend heavily. Many people choose one or two small recurring expenses (such as a gym membership or phone bill) and pay the balance in full each month. This creates consistent account activity while keeping utilization low and avoiding interest charges.
3. Keep Credit Utilization Low With Mid-Cycle Paydowns
Credit utilization refers to how much of your available credit you’re using. Keeping that percentage low can significantly help your score. A common recommendation is to stay below 30% utilization, but if you’re aiming for stronger scores, then try to stay under 10%.
One effective strategy is making mid-cycle payments before your card issuer reports balances to the credit bureaus. This approach allows you to continue using your card while still maintaining healthy utilization levels.
4. Monitor Reports to Fix Errors
Regularly checking your credit reports can help you spot problems before they significantly affect your score. The following can drag down your credit unnecessarily:
- Incorrect balances
- Outdated late payments
- Duplicate accounts
- Fraudulent activity
You don’t need to obsessively check your score every day, but reviewing your reports several times throughout the year can be a smart habit. What’s great is that many banks and financial apps now provide free credit monitoring tools that can alert you to changes, so take full advantage of those.
If you discover an error and successfully dispute it, corrections may improve your score relatively quickly.
Raise Your Credit Score Now
The better your credit score, the more opportunities you’ll have in life. Even if you have a poor credit score now, there are things you can do to raise it, so if you start now, you’ll see noticeable results in the near future.
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