5 Things To Protect Your Credit History This Holiday Season

by Jennifer Morgan on March 2, 2012

1. Avoid Department Store Offers for Instant Credit and Do not Open Up New Lines of Credit “Would you want to save 10% today on your acquisition today?”. We've all been asked that question when stumping up for our purchases. Every store under the sun would like to offer you their own Mastercard. This isn't good for your score. The damage to your score you can suffer by opening up a new selection of credit is not worth the few greenbacks you might save. Office score credit is bad quality credit and the credit scoring system scowls on it. Just don’t sign up for the card. You might want or need to sign up for a new auto loan, a new home loan, a re-finance a home loan. By trying for store credit to save a couple of dollars, you could be wounding the chance of getting a crucial loan at a good rate till the middle of next year.

2. Avoid Overspending Spending influences credit. 30% of your credit history is made of how you manage your debt, and when your credit card balances exceed 30% of their available limit, the credit scoring system red flags you and your score goes down right away. The sense behind this is that if you all of a sudden max out your visa cards, it's to the system as if you are in money trouble. Only charge if you can pay the total due in full before the subsequent statement date. Plus, overspending and overcharging will also make you carry bigger balances longer. It is far better to keep your balances low at all points.

3. Pay Your Debts On Time Payment history is 35% of your credit report. One 30-day late can cost you 50 points or more. December is historically the most frantic time of year. Active calendars filled with work and social commitments for relatives and buddies and the hysteria of the season can preoccupy you and make you be late in paying your bills. Make staying on top of your bills a priority. Put all your bills in a file and ensure you pay them in good time. In doing so , you will save points on your credit history and ludicrous late fees as much as $39 or more.

In addition, when you're late in paying your bills, you nullify any favoured finance rate and your account will default to a significantly higher interest rate. A ding to your credit report, a high late charge, and a huge increase in interest rates are all big inducements to be sure you are punctual with your debts. I latterly got a call from a buyer who had been late, although not 30 days late and the rate jumped on his card to over 30% annually!

4. Take a Little time to Plan and Prepare Your Gift Giving We all do it. We walk into a store ready to buy a specific item and end up getting suckered into a spending vortex. Panic spending because the store does not have the item you went in to buy; deciding that if you purchase this item for this person, then you've got to buy this item for someone else; submitting to the enticement of the latest must-have widget. You can prevent this well-woven retailer trap by doing your research on the internet. By preparing before you even darken the automated stoop of the alluring retail conglomerate, you can establish where you can buy specific items and for what cost. In doing this, you can avoid the retail traps and keep control over your spending (and your sanity). Online shopping sites have grown enormously in popularity. Traffic to those sites is up more than 30% from just last year.

5. Manage Your Credit Smartly Keep track of your credit card balances and keep them as low as possible. Studies prove that as buyers increase their Mastercard balances, they become more apathetic about their balances and even about adding new debt. By tracking balances, you will maintain a feeling of control over your credit score and your money affairs. Write out a chart of who you owe, how much you owe, and what the minimum payment is. It'll help you to get a handle on your bills, and help start to plan the easy way to pay them off.

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