Sometimes you just need a new start. For many people, the new year represents exactly that: a time to wipe the slate clean, reset intentions, and begin developing new habits.
Does that mean you can reset your credit scores in the new year and start fresh? Unfortunately, credit scores do not “reset.” In fact, many people will see their credit scores drop in the new year due to debt they incurred over the holidays.
But that doesn’t mean you’ll be stuck with bad credit forever. Credit scores are determined by long-term behavior, making consistency much more powerful than time.
Your credit score calculation may change up to every 30 days.
This is because your debt activity is typically reported monthly to the credit bureaus. And when new information appears on your credit reports, your credit scores will change accordingly.
In other words, it’s normal to see your credit scores fluctuate each month. Just don’t expect major changes to happen in a short time. In my experience helping thousands of consumers improve their credit, it typically takes at least a year to gain 80 points or more.
Read more: Can you increase your credit score by 100 points overnight?
Your credit scores can change each time the information on your credit reports is updated. If the update is positive, such as a reduction in your loan balances or an error being removed from your reports, you may see your credit score increase.
If there is a negative change in your debt situation, you can expect your credit score to go down. During the holidays, many people experience this due to new debt they incur for gifts, trips, or holiday parties. In fact, 79% of people said they would cover these expenses with credit cards during the 2025 holiday season, according to a survey conducted by The Harris Poll on behalf of the American Institute of CPAs (AICPA).
Here is an overview of the top activities that cause your credit score to go down:
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declare bankruptcy
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Have an invoice go to collections
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Missing a debt payment
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Increasing your debt
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Open a new loan or credit card, including buy now, pay later (BNPL) loans
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Closing of loans or credit cards.
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Apply for multiple new debt accounts in a short period of time
Read more: 8 Common Reasons Your Credit Score Might Have Dropped
Whether you’ve racked up debt over the holidays or are simply looking for ways to earn points, there are plenty of ways to improve your credit score. These are some of the best options.
The AICPA survey found that 17% of people say it will take them more than six months to pay off their vacation debt. If that includes you, choose one or more of these strategies and resources to help speed up the process and recover the credit points you lost over the holidays:
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Consolidate debt: Consider using a personal loan to pay off your credit card debt. Since the average interest rate on personal loans is much lower than that on credit cards (11.14% versus 21.39%, respectively), paying off credit cards with a consolidation loan can help you save money on interest and get out of debt faster.
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Cut spending: Reduce your non-essential expenses for a few months to free up more money for debt repayment.
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Credit counseling: Contact an NFCC-certified credit counseling agency for help adjusting your budget, reviewing your credit reports, and finding out if you qualify for debt management services.
It can take years to practice healthy financial habits to build excellent credit. If you want to see long-term growth in your scores, always practice these habits:
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Make at least the minimum payments by the due date on all your debts. The goal is to get to a place where you can pay off your credit cards in full each month.
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Avoid using high-interest, high-risk products to cover expenses, including credit cards, BNPL deals and payday loans. Instead, rely on your emergency savings in case of need or, if necessary, consider a personal loan or borrowing money from a loved one.
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Get your free credit reports from AnnualCreditReport.com at least twice a year. Monitor your reports for signs of identity theft and dispute any errors you find.
Read more: Is it possible to achieve a perfect credit score of 850?
You can also try to get help from a loved one with good credit. If you have a spouse or family member who is willing to help, ask them to add you as an authorized user to one of their credit cards. If they do, your entire account history will appear in your credit scores, helping you earn points faster.