The holidays are a joyful time—but they can also be a financial minefield. Between travel, gifts, and festive gatherings, it’s easy to overspend and see your credit score take a hit. If you’re planning to buy a home in the coming months, keeping your credit strong is one of the best gifts you can give yourself.
Here’s how to keep your credit merry and bright all season long.
1. Make a Holiday Budget—and Stick to It
Before the shopping begins, set a realistic spending limit. Include gifts, travel, decorations, and any extra dining or events. Overspending can lead to high credit utilization, which is one of the quickest ways to lower your score.
2. Use Credit Cards Wisely
If you use credit cards for holiday purchases, try to keep your balance below 30% of your limit. Better yet, pay off your balance in full each month. Avoid opening new store cards just for discounts—they can temporarily lower your score by adding hard inquiries.
3. Pay Every Bill on Time
Payment history accounts for roughly 35% of your credit score. Set reminders or enroll in autopay to ensure you never miss a due date, even amid holiday distractions.
4. Avoid Big Financial Changes Before Buying
Now isn’t the time to take out new loans, finance furniture, or co-sign for someone else’s credit. Lenders prefer stability when evaluating mortgage applications, so keep your financial picture consistent.
5. Monitor Your Credit Report
Check your credit report regularly to catch any errors or suspicious activity. You can request a free report annually from each of the three major bureaus at AnnualCreditReport.com. If you spot an error, dispute it promptly.
6. Save for Your Down Payment
It’s tempting to dip into your savings during the holidays, but keeping your down payment fund intact will put you ahead when you’re ready to buy. Even small contributions each month can make a big difference when you’re ready to apply.
7. Practice Smart Financial Habits Year-Round
The habits you build now—budgeting, paying bills on time, and managing credit responsibly—will serve you long after the holidays. Lenders look for consistency, so showing a pattern of responsible spending is key.
The holidays are meant for joy, not financial stress. By keeping your credit healthy this season, you’ll set yourself up for a stronger mortgage application and a smoother path to homeownership in the new year.
Ready to find out how close you are to qualifying for a home loan? Reach out to our mortgage team today for a complimentary credit and pre-approval consultation.
