Sometimes you just need a fresh start. For many people, the new year represents exactly that: a time to wipe your slate clean, reset intentions, and start building new habits.
Does that mean you can reset your credit scores in the new year and start fresh? Unfortunately, credit scores don’t “reset.” In fact, many people will see their credit scores drop in the new year due to debt they took on during the holidays.
But that doesn’t mean you’re stuck with bad credit forever. Credit scores are shaped by long-term behavior, making consistency far more powerful than timing.
Your credit score calculation can change as often as every 30 days.
That’s because your debt activity is typically reported to the credit bureaus monthly. And when any new information shows up 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 raise your credit score by 100 points overnight?
Your credit scores can change any time the information in your credit reports is updated. If the update is positive, such as a reduction in your loan balances or the removal of an error from your reports, you might see your credit scores go up.
If there’s a negative change to your debt situation, you can expect to see your credit scores drop. Around the holidays, many people experience this due to new debt they incur for gifts, travel, or holiday parties. In fact, 79% of people said they’d 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’s an overview of the main activities that cause your credit scores to drop:
Filing bankruptcy
Having a bill go to collections
Missing a debt payment
Increasing your debt
Opening a new loan or credit card, including buy now, pay later (BNPL) loans
Closing loans or credit cards
Applying for multiple new debt accounts in a short time period
Read more: 8 common reasons why your credit score could have dropped
Whether you’ve racked up holiday debt or you’re just looking for ways to gain points, there are a lot of ways to improve your credit scores. Here are a few 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 holiday debt. If that includes you, choose one or more of these strategies and resources to help you speed up the process and regain the credit score points you lost during the holidays:
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 credit cards (11.14% versus 21.39%, respectively), paying off credit cards with a consolidation loan can help save you money on interest charges and get out of debt faster.
Cut spending: Reduce your nonessential expenses for a few months to free up more money for debt repayment.
Credit counseling: Reach out to an NFCC-certified credit counseling agency to get help adjusting your budget, reviewing your credit reports, and finding out if you qualify for debt management services.
It can take years of practicing healthy financial habits to build excellent credit. If you want to see growth in your scores that lasts for the long term, always practice these habits:
Make at least the minimum payments by the due date on all of your debts. The goal is to get to a place where you can pay off your credit cards in full each month.
Avoid using high-interest and high-risk products to cover expenses, including credit cards, BNPL agreements, and payday loans. Instead, rely on your emergency savings in a pinch — or if necessary, consider a personal loan or borrowing money from a loved one.
Pull your free credit reports from AnnualCreditReport.com at least twice a year. Monitor your reports for signs of identity theft and to 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, their full account history will appear on your credit scores, which will help you gain points faster.
