Bad credit has multiple negative effects, as it can impact everything from loan interest rates to employment opportunities. If you’re hoping for a better financial situation in 2023, here are five easy ways to improve your credit this year.

Request Higher Credit Card Limits

Credit utilization is one of the major factors that impact your credit score. Utilization is the percentage of the credit available to you that’s used. If you have access to $100 of credit and use only $30, then your utilization rate is 30%. 

A credit utilization rate of 30% or lower is usually recommended. Higher utilization equates to lower credit scores, and the impact is more pronounced once you broach the 30% mark.

You can lower your credit utilization by increasing the amount of credit that's available to you. Call your credit card companies and ask if you’re eligible for a credit increase. Your best chance is to ask for a 10-25% increase. If they grant it, then you’ll decrease your utilization of the card proportionately.

(Note: Only request a higher limit if you’re able to use it wisely. Don’t do this if you’ll use the increased limit to charge more, and only add to your debt. Paying down balances is another, recommended, way to reduce utilization.)

Become an Authorized User

An authorized user is someone who has access to a credit card (or other line of credit), but the card isn’t actually in their name. The card’s record is attached to their credit report -- and thus the card’s payment history and utilization affect the authorized user’s credit score.

If you have a close family member with good credit, ask if they’ll make you an authorized user. Their good credit will positively impact your credit. Just be sure that the relationship has a high degree of trust, and that you don’t abuse the authorization. It’s best if you don’t even use the card at all -- the card’s history will still show on your credit report. (This is most common with teens/young adults and their parents).

Dispute Credit Report Errors

Errors on your credit report can negatively impact your credit in a big way. Regularly check your credit for errors, and dispute any that you identify. Ideally, you should do this three times a year (see below).

You can obtain a free credit report from each of the three major credit bureaus (TransUnion, Experian, Equifax) through annualcreditreport.com. The site allows you to request a free report from each bureau once per year, thus you can check one of the bureaus every four months. Annualcreditreport.com is a government-mandated site and the only one that should be used for this purpose.

If you notice any errors on one of these reports, dispute it using the bureau's official channels for disputing records.

Pay Bills On Time

Your payment history is the biggest factor in determining your credit score. Do everything you can to pay bills on time, and you’ll likely see quick increases in your credit score if you’ve recently been late with payments. Catch up if you’re behind on anything, too.

Finance a Car Purchase

If you need a different vehicle, a car loan can go a long way to reestablishing your credit. This is an especially practical method if your credit isn’t too good, as bad credit car dealerships are usually still able to provide loans.

With a car loan, you can increase your credit mix and establish another loan that’s paid on time. Both will improve your credit score, and you may see an uptick in your score fairly soon after your vehicle purchase.

If you’d like to explore your vehicle and car loan options, talk with us at Fast Start Auto. We’re a leading bad credit car dealership in Salt Lake City, and we’ve helped many drivers get both better vehicles and better credit.