Learn how to increase your credit score using a credit card at the end of the year

Use Your Credit Card to Raise Your Score This Year

As the year comes to an end, many Americans start reviewing their finances, checking savings, setting new goals, and thinking about how to improve their credit score. The holiday season, though full of cheer, can also bring extra expenses that make managing credit tricky.

But here’s the good news: if you use your credit card wisely during this time, it can actually help you build a stronger credit score for the new year.

Let’s explore how you can make the most of your credit card in these final months to boost your credit score effectively and safely.

1. Understand How Your Credit Score Works

Before making changes, it’s essential to understand what affects your credit score. The most widely used model in the U.S. is the FICO Score, which ranges from 300 to 850. It’s based on five main factors:

• Payment history (35%) – Whether you pay on time;
• Credit utilization (30%) – How much of your available credit you’re using;
• Length of credit history (15%) – How long you’ve had your accounts;
• New credit (10%) – How often you apply for new credit;
• Credit mix (10%) – The variety of credit types you use (cards, loans, etc.)

Knowing this breakdown helps you see where your habits have the most impact, and where small adjustments can make a big difference.

2. Don’t Close Old Accounts Yet

You might be tempted to simplify your finances before the new year by closing unused cards, don’t.

Closing an old account can shorten your credit history and reduce your total available credit, which could lower your score.

Instead, keep older cards open, even if you only use them for a small recurring charge (like a subscription) and pay them off monthly. This maintains your credit length and utilization ratio in good shape.

3. Request a Credit Limit Increase

If you’ve had a solid payment record this year, the end of the year might be a good time to ask for a credit limit increase. Many banks review your account automatically, but you can also request it manually online.

A higher limit reduces your credit utilization, as long as your spending doesn’t increase along with it.

For instance, if your limit goes from $2,000 to $4,000 and you still only use $800, your utilization drops from 40% to 20%, which can positively affect your score.

4. Check Your Credit Report for Errors

Before entering a new year, review your credit report from the three major bureaus, Experian, Equifax, and TransUnion. You can access each one for free.

Look for mistakes such as incorrect balances, outdated accounts, or payments marked late by error.

Disputing and correcting inaccuracies can give your score a quick, legitimate boost.

5. Use Your Credit Card Strategically During the Holidays

The holidays often mean more shopping, gifts, travel, dinners, and sales. It’s easy to let spending get out of hand, but controlled usage can be beneficial. Here’s how:

• Keep your credit utilization below 30%: for example, if your card has a $2,000 limit, try not to carry more than $600 in balance at any time. Low utilization shows lenders you can manage credit responsibly;
• Pay before your statement closes: even if you plan to pay in full, large balances reported to the credit bureaus can hurt your utilization ratio. Paying part of it before the billing cycle ends keeps your reported balance lower;
• Avoid unnecessary new cards: it can be tempting to open store cards for discounts, but multiple new inquiries in a short time can lower your score.

Final Thoughts

Your credit score isn’t just a number, it’s a reflection of your financial discipline.

By using your credit card thoughtfully during the end-of-year rush, you can set yourself up for stronger financial opportunities in the year ahead.

Whether your goal is buying a home, getting a car loan, or simply qualifying for better credit card offers, these steps will help you get there.

Start today, stay consistent, and watch your credit score grow, one smart swipe at a time.

Written by

Juliana Raquel