8 Credit Tips to Improve Your Score This Holiday Season

With the holiday season upon us, you might be wondering where all the time went. Me too. Expenses (both planned and unplanned) are piling up. You may also be wondering how, through the madness, you can maintain your credit score, improve upon it, or, at the very least, keep it from going off a cliff. Maybe you’ve got an upcoming home or car purchase on your mind. Whatever your reason, working on building/maintaining your credit is never a bad idea. Okay holiday credit warriors, listen up. With these 8 credit tips to improve your score, you just may escape this season with a better credit score than ever.

#1 – Take Inventory

Did you know that you’re entitled to one free copy of your credit report every year from each of the three nationwide credit companies? Just head over to annualcreditreport.com.

A good credit score is anything over 700. An average credit score is anything above about a 650. If your score is below that, you have some work do. But don’t worry, there are still plenty of businesses that will work with you, and working on your score is exactly what we’re doing here.

 

#2 – Available Credit

Your credit score is directly related to how much of your available credit you’re using, so be sure to take note.  For example, let’s say you have three credit cards with a maximum balance of $10,000 each, you’ve spent $5,000 total, and you’ve spent roughly $1,500 on each. You’re in great shape in this scenario because you aren’t coming close to your total maximum balance or the maximum balance of any individual card. If you have plenty of room on your cards, there is no cause for concern. If you’re getting close to your maximum on any, you may think about getting a 0% introductory rate credit card for holiday purchases. You will likely need somewhat decent credit to qualify for these cards, but the savings are worth it if you do. Just make sure you will be able to pay it down before the introductory rate expires.

 

#3 – Length of Credit

You may be wondering whether now is a good time to close out those cards you’ve had for a while and don’t really use. The answer to that would be no, especially if you’re thinking about an upcoming purchase requiring good credit.

Some people seem to think that paying down and canceling credit cards will raise their score. This is simply not true. The credit world is mysterious that way. I’m definitely not telling you to keep your cards open forever, but if you need to use your credit in the near future, it’s best to wait on completely paying off and/or closing accounts.

 

#4 – Retail Store Rewards Cards  

Particularly if you cannot qualify for a credit card with a 0% introductory rate, retail store rewards cards can be helpful to take advantage of offered savings while building credit. A word of caution, never open too many cards of any kind at one time. Doing so will hurt your length of credit history, part of what makes up your overall credit score.

 

#5 – Reporting Payments You Already Make to Credit Bureaus

If you’re looking to boost your credit score or add more to your credit report, you might try reporting payments you already make to the major credit bureaus. You can accomplish this by researching apps for recurring payments you make. For example, reporting rent you already pay each month is possible with the help of several apps and programs dedicated to the service.

 

#6 – Use Someone Else’s Credit Card

I’m joking, right? No, I’m not. By becoming an “Authorized User” on someone else’s credit card (someone that trusts you…like, a lot… that also has good credit), you can have access to that card’s funds while building your own credit. The best part, you will remain without legal obligation to make regular payments on the card.

 

#7 – Installment Loans

You have a big present in mind for that special someone, but don’t want to spend all your holiday cash or tank your credit cards. Installment loans can be a great credit builder. And if you’ve already set aside all the money you’ll need to make the payments, this becomes an incredibly nifty little credit trick. Installment loans are commonly used for jewelry purchases. With this tip, you might find yourself building credit while expanding your holiday budget at the same time. Look at the budding credit pro you are becoming already!

 

#8 – Credit Card Reward Points

Instead of racking up new debt, spend some time reviewing rewards already available to you on the cards in your wallet. You can use travel points to offset holiday visits to relatives, use retail or flexible points to buy gift cards and make purchases that otherwise would have blown your budget. The better you know your rewards programs, the more creative you can get this holiday spending season.

 

Hopefully these 8 credit tips will help you not just survive the holiday season, but help you improve your credit score. With Tax Return season around the corner, you may now find yourself in a great position to make that big purchase that previously seemed like a dream. Happy Holidays and happy shopping!!

 

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3 Tips to Get Your Dream Home and Survive The Holidays

Whether you’re an experienced homeowner or looking to buy your very first home, the process can feel overwhelming. Throw the holidays into the mix and forget it, right? Wrong! Believe it or not, you can have it all. You can give presents that light up your loved ones faces, eat your yearly quota of pie in a single day, practice that special sort of holiday patience that comes from being around distant relatives for too long, and get a little closer to that next home all at the same time. These tips can help:

1. Set a Realistic Budget

You do not have to keep up with the Joneses, and the holidays are no time to forget it! Set a realistic gift budget. Talk with your family and loved ones about setting a limit on how much you will spend per gift for each other this year. If you’re already dealing with some debt, you know this is a no-brainer. But sticking to it can be a different story. Again, make these limits known to everyone well before gifts are exchanged so that you can hold each other accountable.

Now May Not be the Time for a Vacation

Traveling is expensive. Aunt Emily doesn’t have to host Thanksgiving every year. Plane tickets, gas, groceries, kids, entertainment, it all adds up. If traveling isn’t in your budget (see above), let your loved ones know this year. Maybe they come to you this year. You’re saving for your dream home, they’ll understand.

2. About Those Pesky Credit Cards

If you’re using your savings to finance your holidays this year, kudos. By far, this is the best method to make sure the holidays don’t derail your efforts at saving for a new home. If not, that’s ok too. But please, tread lightly.

It May be a Good Time to Cash in Those Rewards Points

Instead of putting more on cards, why not cash in those reward points? There are all sorts of reward programs, and countless reward credit goes unclaimed each year. What better time to use your points?!

Do You Know Which of Your Credit Cards Have the Lowest Interest Rates?

Well, do you? Find out, then do yourself a favor and use those cards! This makes it easier to pay back the balance without negatively affecting your overall score.

It’s the Most Wonderful Time of the Year… To Build Your Credit Score:

The Holidays are the perfect time to build up your credit score. Yes, you heard that right!

Did you know that your credit score is determined in part according to the amount of credit you spend vs. the amount of overall credit you have? To put it another way: if a main concern is overall credit score, it can sometimes make sense to open another credit card so that your overall credit expenditure and score stays the same or improves!

Research the stores this Holiday Season that are offering low interest or extended no interest periods. These are the perfect ways to buy presents for your loved ones this year while also building your credit score.

Use caution here, though, and never over-extend yourself if you’re not able to make timely payments. Also be sure to pick these stores wisely because you don’t want to have too many inquiries on your credit report. Find the credit cards that work for you, and be sensible on the amount you spend so you can pay it down in time for your new home purchase!

Alternative Down Payment Ideas

Your Retirement Savings Plan

The truth is it’s difficult to save for everything we know we should. Sometimes, we have to make choices about what we should be saving more for right now. Many retirement savings plans offer “penalty-free withdrawals” for “qualified expenses” or “lifetime events,” including a down payment on a home. Every plan varies, and it’s important to weigh costs and benefits. Some plans offer withdrawal in exchange for increased future contributions to make up for the loss in savings.

Down Payment Costs Vary by Home Loan Program

Did you know that the USDA offers a zero down payment home loan for rural homebuyers? How about that many counties offer Down Payment Assistance (DPA) programs to help borrowers with down payment funds?

 

Bottom line, get creative.

Don’t let anything stand in between you and your dream home. Not even the holidays.

 

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