How to improve credit score—tips from debt expert

If your goal is to improve your credit score in 2023, don’t count on the “15/3” credit card hack to help.

Numerous videos with thousands of likes on various social media platforms claim that you can quickly improve your credit score by splitting your credit card payment into two installments. You make the first payment 15 days before your payment due date and the second about three days before your due date.

But this “hack” doesn’t hold a lot of weight, says Natalia Brown, chief client operations officer at National Debt Relief, a company that helps consumers get out of debt.

While making extra midmonth payments can help you pay down your credit card balance, and therefore lower your credit utilization, there’s nothing special about paying 15 and three days before the due date, Brown tells CNBC Make It.

Here’s what Brown says to do instead.

Focus on your credit reporting date

Rather than focusing on 15 and three days before your payment is due, there’s another date worth keeping in mind: your credit reporting date.

Credit card billing cycles are typically 29 to 31 days, and the last day is your statement closing date.

The balance that remains on your card as of the statement closing date is usually reported to the credit bureaus a day later, although it varies by card issuer. You can call your credit card issuer to find out when they typically report to the credit bureaus.

Aim to pay off your entire balance before this reporting date, Brown says. By eliminating, or at least greatly reducing, your balance, you’ll lower your credit utilization rate before it’s reported.

This is key because your credit utilization, which is the amount of your total available credit that you’re currently using, accounts for 30% of how your credit score is calculated, according to FICO.

Lenders like to know how well you’re managing your loaned funds, which is why financial experts typically recommend that you don’t use more than 30% of your available credit. It shows you’re responsible for paying it back on time.

If you aren’t able to pay off your full balance by the reporting date, try to pay at least 10% more than the minimum amount due, Brown says. This can help you chip away at your balance faster.

Gen Zers and millennials generally have good credit

Unfortunately, there aren’t any quick fixes when it comes to increasing your credit score. The good news is that Gen Zers and millennials tend to have decent ones already.

Scores between 670 and 739 are considered “good,” according to FICO. The average Gen Z (age 18 to 24) and millennial (age 25 to 40) credit scores are 679 and 686, respectively, according to the latest available data from Experian.

Scores ranging from 740 to 799 are considered “very good” and any score over 800 is considered “exceptional,” according to Experian.

Although having a “perfect” 850 credit score may earn you bragging rights, it doesn’t come with many additional benefits.

“You don’t need to be perfect,” Ted Rossman, senior industry analyst at Bankrate.com, tells CNBC Make It.

“While the FICO scale runs from 300 to 850, once you’ve hit the mid-700s, you should qualify for the best terms on loans. Lenders don’t really distinguish between, say, a 760 and a ‘perfect’ 850,” he says.