The holiday season is here. Before you whip out that eggnog and gear up for a marathon shopping trip, pause and make sure you’re not practicing behaviors that could jeopardize your credit. Getting caught up in holiday cheer and the charge frenzy is a quick way to get into financial trouble. Your payment history accounts for 35% of your FICO score.
Here are four ways to keep your credit in tip-top shape during the holidays.
Don’t apply for store credit cards.
Opening a new account could spell trouble for your credit score. This is because the length of your credit history makes up 15% of your FICO score. The older your credit age the better, as it shows a long history of credit management. Opening a new credit card account will lower your overall credit age, and consequently, your score. Applying for credit also means that there will be an inquiry on your report. Inquiries related to new credit accounts make up 10% of your FICO score.
Don’t overcharge.
Be mindful of how much you’re spending. If you won’t be able to repay the amount you charge at the end of the month, reconsider your purchase. Charging too much on your card will cause the amount you owe to spike. Amounts owed account for 30% of your FICO score.
Be cautious when shopping online.
If you’re shopping for gifts online, make sure that you only visit websites that you’re familiar with or that you’ve done business with in the past. You can also protect your information by applying for a temporary credit card number. To do this, you have to contact your credit card issuer or bank and make a request. The bank then provides a new, temporary number that is linked to your credit card account.
Don’t forget to pay your bills.
It’s easy to forget to pay your bills when you’re traveling and visiting relatives. Set up reminders on your calendar or automatic bill payments so that you won’t miss a payment and get a negative mark on your credit report.
