The holidays are a stressful and busy time for everyone. From decorating the house to baking holiday meals for the family, everyone is scrambling to finish their holiday to-do list. As family members frantically round up the ingredients and gifts they need for the season, however, it can be easy to forget to keep track of how much the family is spending - and without knowing how many times you’ve swiped your credit card, it’s difficult to understand how your credit score will be affected. So, here’s how to protect your credit score this holiday season.

1. Make sure to use different credit cards as you shop: As you make your holiday purchases, make sure to rotate out your credit cards each day or after several purchases. This is typically a great way to keep your overall credit card balance under 30 percent, which lenders will regulate if you are looking to take out a loan soon. You might even consider using a debit card or cash for some purchases.
2. Avoid the “free” store credit cards: Throughout the holiday season, shoppers tend to receive more offers to sign up for “free” store credit cards in return for some sort of store discount. Although signing up for this card does not require an upfront fee, retailers use these cards to entice you to buy more than you usually would. They also typically have high interest rates. In addition, depending on your current score, these cards may temporarily lower your credit score by 10-20 points. In other words, it’s just best to avoid them altogether to protect your credit score.
3. Create a plan that details how you will pay down your balances: Every 30 days, your credit profile is assessed. This means it’s important to pay down your balances as quickly as possible after making a purchase. Prior to starting your holiday shopping, you should therefore create a plan that details how you will do this. For instance, if you are expecting a Christmas bonus, consider budgeting your gifts based on that amount of income. You know you will receive the extra money, so you know you can apply this towards paying down your December balance.

Overall, preparation and awareness is key when it comes to protecting your credit score this holiday season - especially if you would like to take out a loan in the near future. For more information about how your credit score affects your ability to get approved for a mortgage, or to learn more about home financing, contact one of our mortgage specialists today.