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U.S. consumers have an average credit score of 715, according to Experian. And while that’s a good score, it’s not considered great.

Experians classifies a credit score of 740 to 799 as very good and designates scores of 800 to 850 as excellent. So if you want to qualify for the most affordable borrowing rates on your next loan, you’ll want to get your credit score into those ranges. And it’s especially important to do that now for one big reason.

Borrowing costs are finally easing

You may have heard that the Federal Reserve has begun cutting its benchmark interest rate. And you should know that the Fed will likely continue making rate cuts into 2025.

If you’re wondering how that might impact your finances, here’s the scoop. A lower federal funds rate is likely to lead to lower interest rates for consumer loans like mortgages, auto loans, personal loans, and more. Come 2025, you may be more eager to sign a loan when it’s cheaper to borrow.

That’s why now’s such an important time to boost your credit score. If you work on that over the next few months, you may find that by the time you’re ready to sign a loan, you’re in a better position to not only qualify but also snag a great rate that results in lower monthly payments.

How to boost your credit score

Boosting your credit score in a meaningful way may not happen overnight. But if you commit to it over the next few months, you may find that you’re in a great position to sign a loan in 2025 once rates are more appealing to you. Here’s how.

Pay on time

One of the most important factors in calculating a credit score is your payment history. Paying your bills on time and avoiding late payments in the coming months is crucial, so set calendar reminders to avoid being late. And where possible, put your bills on autopay.

Increase your income

Make sure you’re not late paying your bills due to a lack of funds. And if money is an issue, set up a budget that makes it easier to track your spending. You may also want to consider taking on a side hustle to boost your income. Now happens to be a good time to get one, given that many businesses need extra holiday help.

Pay down debt

Another great way to boost your credit score is to lower your credit utilization, which measures the amount of available credit on your cards you’re using at one time. Paying off some of your existing credit card debt could give your score a nice increase — plus save you money on interest.

Consider a balance transfer

If you’re juggling balances on multiple credit cards, consider a balance transfer. These offers generally give you a period of 0% interest so you can get ahead of your debt and whittle it down sooner. And if you’re willing to work a side hustle, you can use some of your extra earnings to chip away at that debt faster. Click here for a list of the best balance transfer credit cards.

Check your credit reports for errors

Finally, pull a copy of your credit report from each reporting bureau — Experian, Equifax, and TransUnion — and review it for errors. If you see a mistake that hurts you, like a late payment you actually made on time, contact the bureau in question right away to try to get that error corrected.

Set yourself up for success

Borrowing costs have been high these past few years, but serious relief may be in sight for 2025. Your best bet is to boost your credit score as soon as possible so you’re able to take advantage of more affordable loan rates in the new year.

Remember, too, that even if you don’t expect to borrow money in 2025, you never know when that need might arise. For example, you may end up having to replace your car unexpectedly. The higher your credit score is, the easier it becomes to borrow money in a pinch.

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