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One of the most common New Year’s resolutions people set is to improve their finances. It’s a worthwhile goal, but it’s easier said than done. A lot of people struggle because the lifestyle changes required may be too much to keep up with.
It can also be challenging when you’re working with such a vague goal in the first place. Improving your finances can involve a lot of moves — paying down debt, building your savings account balance, setting up a retirement account and contributing to it regularly — and it’s hard to know which goals to prioritize first.
Let’s cut through all the confusion and focus on the one thing that will likely be most impactful to your financial future.
Your credit affects all aspects of your financial life
If you’re only going to do one thing to improve your finances in 2025, I suggest setting a goal to improve your credit score as much as possible. This might not be what you had in mind, but it makes sense when you realize just how many areas of your life your credit score affects.
Among other things, it determines:
- Which credit cards you’re eligible for
- Whether you get approved for a loan and what interest rate you pay
- Whether you can rent certain apartments
- How much you pay for auto insurance in most states
- Whether you get hired for jobs that involve managing finances
Given all these applications, a good credit score can do a lot to lower your monthly expenses. That will in turn give you more money to put toward other financial goals.
Here’s how your credit score ranks
The most common credit scoring model is the FICO® Score, which ranges from 300 to 850, with a higher score being better. Some credit cards give you free access to your FICO® Score. There are also services online that let you pay to check your score.
All lenders have their own rules about which credit score falls into which tier, but here’s how FICO itself defines the credit score tiers:
| Credit Score Tier | Credit Score Ranges |
|---|---|
| Poor | 300 to 579 |
| Fair | 580 to 669 |
| Good | 670 to 739 |
| Very Good | 740 to 799 |
| Exceptional | 800 to 850 |
Unless you’re in the Exceptional tier, you have some room for improvement. But you’ll see the biggest benefit from increasing your score if you’re currently in the Poor or Fair credit ranges. Improving to the Good or Very Good tiers can have a dramatic effect on your finances.
How to improve your credit in 2025
There are several things you can do to improve your credit in 2025. Some of the most impactful are:
- Paying your bills on time: Payment history is the most important factor in your credit score calculation. Set reminders or use automatic payments to ensure you don’t miss due dates.
- Pay down credit card debt: Too much debt is a red flag to lenders. Try using one of our top balance transfer cards to help you get rid of your credit card debt faster.
- Limit how often you apply for new credit: Avoid applying for new credit cards more than once every six months. Submit all loan applications within about 30 days of one another so they count as one single application on your credit report.
- Leave old credit cards open: Unless the card charges an annual fee you’re not recouping, leave it open. This increases your average credit account age and boosts your score.
It’s fine to have a target credit score in mind, but understand that improving your score drastically takes time. Credit scores are designed to give a long-term look at how you manage borrowed money. You might not reach your goal by the end of 2025 and that’s OK. Any improvement will help you save in all the areas of your financial life mentioned above, so stick with it.
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