By: Ann-Marie Murphy, Quizzle.com
With the holidays just around the corner, there's no time like the present to get smart about your credit. Give yourself the gift of good credit by making intelligent decisions this holiday season. After all, good credit is the gift that keeps on giving.
1. Check Your Credit Before the Holidays
A single error on your credit report can take a major toll on your credit score. And the last thing any of us want is to be declined at the register when trying to purchase gifts on a credit card. Before you start shopping, check your credit report to make sure there are no errors. If you spot something that's wrong, dispute it with the credit bureaus to correct it. You can get a free credit report and score, no strings attached, plus the ability to dispute inaccuracies at Quizzle.com.
2. Don't Let the Retail Credit Card Offers Tempt You at Checkout
We've all been there. You step up to the register at a retail store with your arms full of gifts and you're asked if you'd like to save 10 percent off your purchase today by opening a new credit card. There's nothing wrong with a deal, but the problems often times with these cards are the credit limits are low and the interest rates are high.
When you charge purchases on a low limit card, you may be using a large percentage of the credit that's available to you on that card - aka, "credit utilization." When you're using a higher percentage of your credit - both on individual cards and overall - it signals to creditors and lenders that you may be a higher risk, which is reflected in your credit score.
Also, each time you open a new credit line, your credit score takes a hit. The negative impact becomes even more significant if you're opening several of these cards in a short period of time.
3. Keep an Eye on Your Credit Limits
When scouring for deals, it's easy to forget that there is a limit to how much you can charge. By going over your limit, or even getting close to it, you can significantly hurt your credit score.
4. Check Your Interest Rates Before You Shop
Many credit cards hold a variable interest rate and without you even knowing it, your interest rates could go up - even if you've been responsible with your credit. That's why it's important to know your interest rate on each of the credit cards you might use when shopping during the holidays. If you don't pay your credit card balances in full each month, charging your purchases to your lowest rate card is your best bet. You'll save money in interest in the long-run, allowing you to pay down balances faster.
5. Be Especially Vigilant about Identity Theft
Identity theft is prevalent around the holidays, so it's smart to be especially careful with your credit cards during this time of year. Make sure you get your credit card back after making a purchase and don't forget the receipt!
When shopping online, look for security symbols - like VeriSign or TRUSTe- on websites to make sure they're safe, secure and use encryption to protect your personal financial information.
6. Don't Get Distracted from Your Bill-Paying Duties
Just because you're busy with holiday parties, decorating the house and gift-shopping, does not excuse you from paying your bills on time in December. Remember: A big piece of your credit score - approximately 35 percent - is determined by how reliably you pay your bills each month. If you miss even one payment, you can significantly damage your credit score.
Make sure to pay at least the minimum payment on each of your bills. If you need to sneak a reminder Post-It into your Advent Calendar to remember, do it! Don't let the "Season of Giving" give you heartburn in the new year because you let your credit score dip.
7. Only Spend What You Can Afford
If the debt you rack up during the holidays takes you until next year's holiday season to pay off, you're spending too much. Set a holiday spending budget, including gifts you plan to buy, and stick with it. If you've had a rough year financially, consider making gifts with your own hands. Homemade gifts are often the most thoughtful and memorable gifts you can give someone.
It's easy to be careless with your credit around the holidays. For many people, it's the time of year when credit cards get the most mileage. But remember: Your credit, if managed properly, can give you access to big savings and the best interest rates and terms - all year round. That's why it's important to protect it 365 days a year.
Looking for more credit tips? The Quizzle Blog's got you covered:
- 10 Common Myths about Credit Reports and Scores
- Build Credit from Scratch in 5 Easy Steps
- 7 Simple Ways to Improve Your Credit Score
- Understanding Credit Reports and Credit Scores
- How Do Credit Inquiries Affect Your Credit Score?
For a totally free credit score and free credit report, no strings attached, no credit card needed, visit Quizzle.com. Quizzle is the free and easy way to manage your home, money and credit - all in one spot.
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