7 tips to help shape up your credit before the holidays

It’s not too late to think about holiday gift shopping, but know that you can take some steps to mitigate this annual budget-busting situation.

While significantly improving your credit can take years of responsible financial management, there may be smaller changes that will help you prep your credit in advance of the holidays.

Smart spending and saving now will help when the festive season does come around so you won’t end up with a holiday credit hangover.

• Dispute inaccurate credit information

Under our National Credit law, you have a right to request that information inaccurately reported to the bureaus be removed from your credit report in a timely fashion. Removing even one account that’s past the allowable reporting period, or fixing an account incorrectly listing late payments, may improve your credit score.

• Check credit limits

Use your free annual credit report to verify that the credit limits for all accounts are listed accurately.

The size of your credit card debt compared to your available credit factors into your credit score. If it looks like you’ve maxed out all your lines of credit, your score would probably suffer. Occasionally, a card issuer forgets to inform the credit reporting agencies that it bumped up your credit limit.

• Request a credit limit increase

Consider contacting one or two of your credit card issuers and request a credit limit increase. Unlike a credit card balance transfer that might damage your credit score if not managed responsibly, a credit limit increase simply increases your available credit, making your current credit balances seem comparatively lower.

ALSO READ: How to prepare a scrumptious Christmas dinner

• Automate your payments

Your history of making payments on credit accounts can comprise a significant portion of your score. If you’re forgetful about paying bills, register for debit order payments. Even six months of on-time payments may boost your credit score.

• Don’t open or close accounts

Many people think closing unused credit accounts improves their credit outlook, but that’s often not the case. Closing accounts changes your level of available credit, while opening new accounts can make it look as if you’re overextended.

• Mix up your credit types

Using your credit card isn’t the only way to build good credit. Taking out a small personal loan or buying a piece of furniture or large appliance on installment can result in a slight boost to your score.

• Negotiate with creditors

If you have any accounts past due, also known as ‘delinquent’ accounts, a quick way to help improve your score is to negotiate a settlement with the creditor for the amount you owe.

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