My guest blogger for today is Ethel Wilson who has been advising clients how to improve their credit score ratings for over 12 years.
As wonderful a time of year as it is, the holiday season can wreak havoc on your credit score if you’re not careful. Many people are simply not aware of how big a role their credit rating plays in their lives. Not does it only affect your ability to obtain credit; it can also influence your employment and residential prospects. Employers and landlords regularly check a person’s credit record on application, and consider a poor credit score to be indicative of unreliability or irresponsibility. As unfair as that might seem, it is the reality of our world, and so maintaining a decent credit rating should be a major concern for everyone.
Because of the increased spending that the holiday season evokes, many credit scores suffer severe damage during this time. Over-spending is the prime culprit, and maxing out credit cards and taking out personal loans to buy gifts or to go on holiday are common occurrences. The real problem arises in the New Year when consumers find they are unable to repay that credit. Missed and late payments damage a credit score more than any other single behavior, and credit scores can plummet by 100 points or more within a few months. The best way to avoid this happening to you is to formulate a budget, and stick to it! Your credit score is a number that is calculated by the credit bureaus to reflect your credit history at a single glance. Lenders consult it to decide whether they’ll even consider you for a loan or not. It is formulated by taking into account the following:
- Your Bill Payment History
- The Amount You Owe at Any Time
- The Length of Your Credit history (How Long You’ve Been Borrowing)
- The Types of Credit You Have (Credit cards, mortgages, car loans etc.)
Establishing a budget can not only protect your credit score, it can improve it. Set a limit to your credit card spending that will allow you to pay off any balances as soon as possible after the holidays. Once you reach your set limit, use only debit cards or cash. If you plan carefully and spend smart this year, you’ll avoid any post holiday financial woes, and improve your credit score at the same time.
Ethel Wilson has an extensive background in the banking, credit scores and financial industry; she now shares the best of her credit score information as a contributor and editor of http://www.creditscoreresource.com
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