The stores are all decorated in red and green and lots of tinsel, and Mariah Carey is blasting from every big-box retailer. All that can only mean one thing: The holidays are here! And with the holidays, for many, it’s a time for spending time with your loved ones, and gift-giving. Whether this is your favorite time of year or you’re just waiting for it all to be over, these tips for protecting your score can help you get through the holidays and keep your credit unscathed.
How Do I Protect My Credit When Shopping for Holidays?
Protecting your credit when shopping for the holidays is important. Whether you’re trying to continue to build your score over the holidays or just maintain an already good one, these tips and tricks can help.
1. Know Your Starting Point
Before you start your holiday shopping, find out what credit score you currently have.
This ensures you have a baseline so you can tell how your holiday shopping is affecting your credit.
While you can get your credit report for free from AnnualCreditReport.com, you usually have to pay to get your credit score.
However, many credit card companies offer access to your FICO score as a card benefit, which is the score lenders prefer.
You can also get an idea of your score if you’ve recently applied for another form of credit, such as a mortgage.
You should receive a piece of paper with your other documents that lets you know what your score was when the lender pulled it to qualify you for financing.
It might not be extremely accurate if it’s not very recent, but as long as you haven’t made any big changes to your credit, it should give you a rough estimate of where you’re at.
2. Keep Your Information Secure
If you plan on doing a lot of your shopping online, it’s important to only shop at reputable businesses that have practices in place to keep your information secure. Before buying from a new place, do some research.
- Google its name and check out reviews from other customers
- See if it’s listed by the Better Business Bureau and what grade it has
- Search for the name of the business and the word “complaints” to see if anything comes up that’s suspicious
- Make sure the front of the URL says “https” and not just “http” before putting in your information
It’s also important to keep in mind when and where you’re shopping. Scammers can use cameras to take pictures of your card as you use it or use devices called skimmers to swipe your credit card info without you knowing.
Keep an eye out for these potential scams and ensure your information will be secured before making any purchases.
3. Avoid Identity Theft
In addition to keeping your personal information secure, be aware of the common holiday scams that often go around. For example, it’s common for scammers to set up fake charities to pocket money sent in for charitable holiday donations.
It’s also close to the beginning of the new year, which means you may see some attempts at tax scams, such as telling you you’re going to be audited. Wire fraud scams are also common at this time of year.
The best thing you can do to protect yourself is verify that an organization is legitimate before you donate or do any kind of business with it.
If you think you’ve stumbled upon a potential scam or you’re already a victim of identity theft, report it to your local police.
4. Keep an Eye on Your Balances
In 2020, the average American spent almost $1,000 on holiday gifts. If you plan on putting all this on your credit card, your credit score can take a hit.
This is because you’re decreasing the amount of available credit you have, which is an important factor in your credit score.
If you open a new card, such as a store card to get a discount, this can also make your score drop by a few points because it’s a hard inquiry on your credit.
As long as you pay your holiday shopping off before your next billing statement, you shouldn’t see much of a change in your score.
This will also save you money over the long term by keeping you from paying interest on your holiday purchases.
5. Monitor Your Credit
If you really want to make sure your credit stays in the right direction over the holiday season, it can be a good idea to consider signing up for a credit monitoring service.
These services give you access to your credit report — and very often your credit score — on demand, so you can see in real time what’s going on.
You can track how your purchase and payment habits are making a difference in your score, and it can help you catch possible identity theft more quickly.
Can Online Shopping Affect Your Credit Score?
Shopping online doesn’t do anything to your credit score that shopping in person wouldn’t. But how you’re shopping and where you’re shopping can indirectly affect it.
For example, if you’re more likely to go over budget when you’re filling your online cart as opposed to pushing a real one up and down the aisles, shopping online could bring down your credit if your credit card balances get too high.
If the store you shopped at has a security breach, it could increase your chances of identity theft and potential issues with your credit.
How Can You Maintain Good Credit?
Now, you know how to keep your credit in good standing over the holidays.
But what about when the decorations go down and the new year is here?
A lot of these same tips still apply!
The most important things when it comes to maintaining good credit is to always make your payments on time (avoid carrying a balance at all if you can) and keep your ratio of debt to available credit low.
DISCLAIMER. The information provided in this article does not, and is not intended to be, legal, financial or credit advice; instead, it is for general informational purposes only.
Orlando is a writer and content specialist for the credit.com team committed to creating helpful, informative and eye-catching content.
He completed his undergraduate work at the University of Utah focusing on Film and Media Arts.
He’s written blogs and journalistic content for many different industries, and narrowed down his niche to the financial industry. In his off time, Orlando puts effort into crafting creative content around the arts.