When it comes to your financial personality, there are few metrics more important than your credit score. This number can influence not only your ability to get approved for top travel credit cards but also the interest rate you pay on a mortgage, your ability to get an auto loan, and other aspects of your life.
If you’ve made a New Year’s resolution to improve your credit score in 2025, here are some strategies to successfully do so.
Understand credit score basics
Before getting into these tips, let’s start with just a quick overview What Makes Up Your Credit Score Right off the bat, it’s important to note that there are two main credit scoring models: VantageScore and FICO.
While there are a few minor differences between the two, they both attempt to numerically measure the same thing: your trustworthiness as a borrower.
A low score indicates a high risk of defaulting on a loan, thus reducing the amount or credit a financial institution is willing to lend you (or reducing your chances of being approved for a loan altogether).
On the other hand, a higher score indicates that you are less likely to default and therefore able to handle larger loan amounts and smaller fees.
Both scores fall on the same scale (300-850) and use the same general criteria:
- Payment history: How many missed or late payments you have in your credit history.
- Amount Due: Often referred to as your credit utilization ratio, it measures how much of your available credit is currently being used.
- Length of credit history: The average age of your accounts across lenders.
- New Credit: How much new credit you’ve recently acquired, including the number of hard inquiries.
- Credit mix: Different types of accounts you have (credit cards, auto loans, mortgages, etc.).
By paying attention to these five things — especially the first two — you can be well on your way to improving your credit score.
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Related: Your next credit card approval is in the hands of these three agencies
Review your credit report for inaccuracies
One of the most important things you should do is review your credit report for inaccurate information.
According to a study conducted by Consumer Reports, nearly a third of consumers have found an error on their credit reports. In many cases, these errors are not malicious (eg, identity theft) but rather inaccuracies related to similar names or other simple mix-ups.
Fortunately, there is a federally documented procedure for eliminating these errors. This article from the Federal Trade Commission Each week provides full details of the steps, including how to request your free credit report.
Once you identify the error, submit a dispute letter directly with the credit reporting company; you can use Sample of FTC for inspiration. The bureau must investigate the complaint, which usually involves going to the agency that provided the disputed information.
If this does not help, the next step is to contact the information provider directly with your complaint; Again, the FTC provides that Sample dispute letter For this purpose. Be detailed but concise and include copies of any documents that support your dispute.
While this process can be time-consuming, clearing your credit report of all inaccuracies is an important step you can take to improve your score immediately — or, at the very least, prevent any future declines in your score related to errors. .
Related: How to Check Your Credit Score for Free
Increase your available credit
Another way to boost your credit score in the new year is to expand the lines of credit you have access to. This seems counterintuitive: surely more credit means more money to spend and, therefore, more risk, right?
While that’s true on the surface, remember that your credit utilization ratio accounts for about a third of your FICO score (and is also a major part of your VantageScore). That’s why getting extra credit can improve your credit score.
There are two different ways to accomplish this:
- Request a credit line increase on existing accounts: Some issuers make it very easy to request an extension online, which usually won’t result in a hard inquiry on your credit report.
- Apply for a new credit card: Although this will result in rigorous scrutiny and Temporarily drop your score, it can still get you a new line of credit (not to mention unlock a potentially valuable welcome bonus). This may outweigh the temporary reduction in the short term and will almost certainly help in the long run.
Here is an example of how this would work. Let’s say you have a credit card with a $5,000 limit. Even though you pay it off in full each month, the card still has an average balance of about $2,500, because you use it as your primary credit card and continue to charge it for purchases as your payment due date approaches.
A general rule of thumb is to keep your utilization below 30%, so in this example, you’re above that (50%).
Now, let’s say you request—and are granted—a $5,000 raise. Or maybe you apply for a new card and are given a $5,000 line. With this one action, you’ve just increased your available credit to $10,000. As long as your balance stays in the $2,500 range, your utilization drops to 25%, which should result in a significant increase in your score over time.
However, this only works if you don’t use the new line of credit to spend more than your income. As long as your spending stays consistent, you’re spreading that amount over a larger credit limit, lowering your utilization and raising your score. Credit cards are not a surefire way to get out of debt; Make sure you keep your purchases in line with your income.
Related: What’s the Difference Between a Hard and Soft Pull on Your Credit Report?
Set up automatic payments
If you’re prone to missing a deadline here or there, you should at least have calendar reminders for your credit card payment due dates and ideally, have automatic payments enabled on your accounts.
As noted above, your payment history is the most important factor in determining your credit score, and even one late payment can lower your score dramatically, as it indicates that you’re struggling. Pay your balance.
By setting reminders or enabling automatic payments from your bank account, you ensure that each payment is processed on or before the due date of your statement.
Of course, this comes with the caveat that you must maintain enough money in your bank account to cover the balance that will be automatically paid. Otherwise, overdraft fees can eat into your earnings and still result in late payments.
Related: How to Set Up AutoPay for All Your Credit Cards
Budget to pay off outstanding balances
Our number 1 Here’s the rule for travel rewards credit cards at TPG: You must pay your balance in full.
If you carry a credit card balance month-to-month, the interest charges that accrue can easily cancel out the value of the points or miles you’re earning on the card — and then some.
However, you may have old debt from your freewheeling days as a college student, or perhaps you chose to finance a large purchase with an introductory 0% APR credit card or deferred interest offer on a store credit card.
Don’t let this balance go unpaid. If you haven’t already done so, sit down and create a budget for how you will pay off this balance to avoid (or minimize) your interest exposure.
Related: How to Consolidate and Pay Off Credit Card Debt
Sign up for credit monitoring
This final suggestion will not necessarily result in an immediate increase in your credit score. Still, it’s a best practice to keep tabs on your score and quickly identify any problems that arise: Sign up for a service that monitors your credit profile and notifies you of any changes.
We prefer to use Credit Karma, a free service that keeps track of you TransUnion and Equifax scores and allow you to view your credit report anytime. You can also set alerts for different things, such as changes to your report.
Related: Making these decisions early helped me build a lasting credit score by earning points and miles
The bottom line
Whether you’re new to the points and miles hobby or have been around for a while, keeping your credit score high is one of the most important things you can do. This will increase your chances of approval for the top Travel rewards credit cards expand your access to installment loans, and you can even lower the interest rates and fees you pay to lenders.
If you’ve made a resolution to boost your scores in 2025, we hope this guide has given you some concrete steps to take to improve your credit health in the coming weeks and months.
Related: 3 Real Ways to Raise Your Credit Score in 30 Days