Money Smarts Blog

If you’ve followed my year-long series on raising your credit score this year, give yourself a pat on the back — we’re in the home stretch! To recap what we’ve learned so far in 2023 …

• In our winter edition, we dove into the benefits of having good credit, along with a few ways to get on the path to improving your score (setting up a free Experian account, reducing debt and making payments on time).
• In the spring, we touched on the impact of late payments, along with a few different types of debt consolidation.
• And this summer, we gave some handy tips on keeping your utilization rate down, paying more the minimum and making sure you review your monthly statements for accuracy.
• Keep up the momentum and follow my last few tips to reduce financial stress during the holidays and keep your credit score intact.

Set a quarterly spending limit this holiday season

Personally, I try to spread my holiday cheer (er … shopping) over the last quarter of the year rather than taking a financial hit all in one month. This way, I’m not completely blowing my budget or taking a hit to my credit utilization ratio (remember, that number is a percentage that shows how much of your available credit you’re currently using, with the goal of staying below 30%). Keep in mind the holidays are supposed to be about family — not stressing out over gifts. Don’t put yourself in a financial pickle over items that might lose their excitement in a month or two.

Smart holiday spending

When the sounds of sleigh bells have faded away, you’ll still have your bills to pay. Don’t get left in the snow! Instead of opening too many store credit cards during the holidays for a one-time crazy good promotion, keep an eye on discounts, rebates and rewards through your favorite store’s apps. (Although we have a whole article on the benefits and drawbacks of closing store cards in case you get a little too holly-jolly.)

For example, the Target Circle loyalty program regularly offers weekly discounts, including some great deals on toys and electronics around the holidays. There’s also PayPal Honey, a free browser extension that automatically scans and tests coupon codes to find you the best deals on the internet. The best part? It’ll apply the coupon with the biggest savings to your cart. Cha-ching!

Skip-a-payment offer staring you in the face. Look the other way!

Despite our best efforts, our financial health can sometimes suffer. If you’re struggling to make your car payment, for example, your lender might talk to you about skipping a payment on your loan. Hooray, right? At first glance, I completely understand how tempting this option can be. But unless you’re really facing a financial hurdle, try your best to steer clear.

Here’s why: Although skipping a payment technically doesn’t hurt your credit score (as long as it’s approved through your lender), you’re still going to have to make that payment eventually. It’ll just be added later in your loan repayment schedule. Plus, interest will continue to accrue, putting you further behind in paying off your loan and potentially negatively affecting the equity in your vehicle.

Boosting your credit score takes time and patience. If you’ve followed along this year, you’ve likely noticed a positive upward trend. Stay consistent! Keep up those good habits and you’ll be on your way to better credit in no time.