Christmas & Holiday Credit Tip

The Christmas & Holiday season is a time full of joy, laughter, and time spent with loved ones.

But, if you have ever stepped into a department store this time of year, you know that it’s also a hectic and stressful time. It’s easy to get caught up in all the parties and shopping, the last thing on your mind are account due dates and closing dates.

You want to make sure that credit card bill/payment alerts are properly set up, this applies to all year long but is particularly helpful during busy seasons, take advantage of auto-pay (get a confirmation number!) so you can rest assured that bills are paid on time.

According to the National Retail Federation (NRF) consumers spent roughly $633 billion during the 2015 holiday season and that number is predicted to rise 3.6% this year.

Individuals should be diligent about avoiding any late payments because it can drop FICO scores 100’s of points depending on your scores prior to the delinquency.

For instance, if John has a 780 FICO score he is a very low risk borrower. Let’s say he forgets to pay his bill on time this month, his score can drop down to 650, which is far from excellent. If John had delinquencies already appearing with a score of 660 prior to a new late payment he may experience a drop of 30-50 points. Since he is already a higher risk borrower his score does not have to drop much to show his new risk level.

Safeguard your credit score this Holiday season, especially if you are planning to go for a mortgage or loan within the next year or two – with the new trending credit data, lenders are looking at your revolving payment history dating back two year in order to assess the borrowers risk level.

If you have any questions or would like us to review reports, reach out to our Expert Credit Team!