3 Tips to maintain your credit score

By now the festive spirit is in full swing; from decorations in shops to heavy traffic on the roads. This is a time for  buying gifts for loved ones and observing family traditions. Unfortunately, it’s also a time for potentially being reckless with credit and  consequently damaging your credit score.

Read on to see how you can enjoy the festive season and still have an intact, or even improved credit score.

Tip: Register here for a free credit report.

Don’t skip your payments

Many people’s routines get interrupted during this time of the year. You might get caught up in the excitement and forget to pay your accounts. Missed payments have the highest impact on your credit score.  According to Clear Score, this information can stay on your credit report for as long as three years.

An easy way to prevent skipped payments is to use debit orders. If you’re getting paid earlier than usual, ask your creditors to deduct their instalments before you get tempted to spend the money on other things. 

Don’t overutilise your credit

With the purchase of gifts, feasting and all the activities that take place during this time, you might find yourself running out of cash and borrowing. Lenders see consumers who overuse credit as a risk. This can result in you being charged higher interest rates on any subsequent applications.

According to Ayanda Ndimande, business development manager of retail credit at Sanlam, a big problem is “buy now and pay in January” deals. She says you must be careful of these as you could find yourself with more debt that you had planned to accrue.

Limit your credit enquiries

Lenders become wary when they see you’ve been trying to open more than a few credit accounts in a short period of time. This can see your credit score take a knock of up to 30%.

If you’re going to take on debt, make sure it’s for something worthwhile. Always remember if an item is not going to increase your net worth, it’s bad debt. Don’t be enticed by festive deals.   

If you are having a difficult time paying your debt, don’t hesitate to seek professional help. Fill in this form to find out how JustMoney can help you.