Want Better Credit in 2023? Take These 5 Steps Now

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

A good credit score is an extremely valuable asset. 

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

Unfortunately, not everyone has a credit score that opens doors for them. If you aren't satisfied with your score, there are some 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 toward improving your credit in the new year. By checking your report, you can identify what exactly is causing your score to be lower than it should be. That can help you make a plan of action. 

For example, if high debt balances are the issue, then you'll need to follow a different process for improving your credit than if the issue is incorrect information or late payments. 

Be on the lookout for any negative information that you can get removed if it's on your report in error, or that creditors might be willing to remove for you if you can work out an arrangement 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 information, you can quickly and easily boost your score.

Don't try to dispute accurate negative info, though, as the credit bureaus will investigate and if they find the negative details are accurate, they won't be removed. 

3. Ask for credit line increases

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

4. Make a plan to pay off debt

You can also reduce your credit utilization ratio by paying down 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 not just at your credit but also your outstanding debt when deciding if they should give you a loan -- so paying off debt can help you qualify for cheaper future borrowing for this reason as well. 

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

If your credit score is lower than you'd prefer because you don't have a long payment history or because you don't have a varied mix of different kinds of loans, then opening up new cards or taking on new installment loans could help improve your score. That's because you need to show you can be responsible with different kinds of debt.

Your own specific credit history will determine which of these five steps could help you the most, but they're worth trying if your goal is to have better credit in 2023.