Image source: Getty Images

In the coming months, the Federal Reserve will likely continue on its path of interest rate cuts. That’s good news, because it could set the stage for cheaper borrowing.

But to save money on any type of loan or financing option, you need to have good credit. And if you’re eager to boost your credit score before the end of the year, you’ll want to take these key steps.

Step 1: Find out your current score

You’d be surprised by how many Americans don’t know their credit score. Last year, badcredit.org found that almost one-third of U.S. consumers had no idea what their credit score looked like.

Finding out your credit score will give you a sense of how much work it needs. If you log into your bank or credit card account, you may find that number easily available to you.

Step 2: Review your current bills and make sure you can pay them

Your payment history carries more weight than any other factor when calculating your credit score. It’s important to make sure you’re not in over your head for managing your bills and debts, since failing to pay on time could be harmful to your credit score.

Take a look at your current expenses and set up a budget so you’re confident you’re able to manage it all. And if not, try shedding expenses or working a side hustle to make sure you have access to the money you need.

Step 3: Reduce your credit card balances

Your credit utilization is another major factor that goes into calculating your credit score. It measures how much of your available revolving credit you’re using at once.

Reducing your current credit card balances is a good way to raise your credit score fairly quickly — provided you have the money to do so. But if you’re willing to work a second job (which may be fairly easy to find during the holiday season), then you might manage to make a serious dent in your credit card debt.

Another option to consider? See if you can qualify for a balance transfer. This allows you to move your various credit card balances onto a single card, and ideally, one with a 0% introductory interest rate. Click here for a list of the best balance transfer credit cards.

Step 4: Read through your credit report and correct errors

You may not enjoy reading your credit report the same way you enjoy reading novels or magazines. But it’s important to review that information and make sure it’s correct. A mistake on your credit report could be damaging to your credit score, so correcting false information that works against you is crucial.

The good news is that you won’t pay a dime to access your credit report. You’re entitled to a free copy every week from each of the three major credit bureaus — Experian, Equifax, and TransUnion. But make sure to check each bureau’s report at least once, since it’s not a given they’ll contain the same information.

A boosted credit score could make your next loan less expensive and easier to qualify for. So it pays to take these steps to set yourself up for success in the new year — especially since borrowing rates are expected to come down.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.