The holiday season, especially the days between Thanksgiving and New Years Eve, can put a crimp on the budgets of most US citizens. Many consumers don’t realize how much they’ve spent until they receive their credit card statements at the start of the next year. It’s fairly common for people to engage in shopping behaviors that can do a number on their credit score.
And those 10% off or 20% off deals are an attraction for consumers to open store credit cards, which are still harmful for their credit. Applying for credit each time reduces their credit score. Store credit cards can also turn out to be a double-whammy for your score as it can affect your credit profile when you open the card and when it needs to be closed.
The short spending splurge can result in long-term problems, and not managing holiday debt responsibility can lower the credit score and limit access to future credit. Also, your interest payments may continue to be a burden for many years if you don’t take immediate action.
The following measures can help you repair your credit and result in tangible benefits that are visible on your credit report:
Pay above minimum balance
While this has been repeated before, it is solid financial advice. Paying above what is due as your minimum balance will assist you in avoiding excessive interest, and lower your debt quickly. This measure will also improve your credit limit to debt ratios, which in turn will improve your credit scores.
Keep an eye on credit information
With credit laws constantly changing, you need to keep an eye on your credit report. Credit limits and interests rate may change, which may lower your credit limit. Some law firms can help consumers ensure they understand what their rights are when it comes to credit repair and help them leverage those rights to ensure they have an accurate, fair, and substantial credit report. By tracking the changes on your credit report and through the right advice, you would be better able to work on repairing your credit.
Be realistic with your financial life
Understand your expenses and current income post-holiday season, and make a budget that you can stick to. If the expenses are exceeding the income, start earning more and spending less. Anything else will result in more financial crisis and therefore more crisis on your credit report. Living within your budget will prevent you from acquiring debt and allow you to get back on the right track. Coordinate this with your debt paying schedule: every time you bring down a balance, your credit score will see an uptick.
How many loyalty programs do you have in your wallet? When was the last time you counted up these points and realized you can bring down your expenses? Often people forget to check in after the holiday season, and the points usually expire resulting in waste. Redeeming gift cards or points for products, travel and other things can bring down expenses and ease the burden on your credit report.
Start monitoring your credit by checking your credit report and credit score every 4 months, so you can also check for dispute mistakes and fix your credit as soon as possible.