FICO Credit Score Advice Calls For More Credit Prudence From Consumers

The holidays and the accompanying shopping spree is going to be stretching the budgets of many a consumer. To make up for any shortcomings financially, some consumers are most likely going to turn to their credit cards. This is why credit card companies are expecting a rise in credit card usage this holiday season and a possible increase in late payments post holiday season.

For consumers who are planning on taking out a loan or buying a home next year, it is probably best to tone down as much as possible on holiday spending. They are going to need a good credit score if they want to have an easier time securing a loan or buying a home. FICO, the company that generates the most widely used credit scores, FICO credit scores, have some advice for consumers who want to keep their credit scores up through the holidays.

This holiday, when consumers go shopping they are inevitably going to get solicited for applying for credit cards. One of the most prevalent ones will be for opening up a store credit card. Major retailers often carry their own store branded credit cards and store clerks usually take every opportunity of pitching them to consumers, especially when they are on the way to the counter. With their very enticing promises such as a 25% discount, they are also quite hard to pass up. Well, according to FICO, consumers who want their credit scores intact after the holidays ought to skip those offers. Opening new credit lines will have a negative effect on their credit scores and will increase the likelihood of late bill payments as well.

It is also not such a good idea for consumers to charge too much on their credit cards this holiday season as well, FICO says. Multiple credit cards can help a consumer’s credit rating but, when he carries a balance on those cards, they inevitably bring his credit score down.

Finally, consumers should always make it a point to pay off their debts completely when the bill comes due. The holiday season is going to make that much harder, what with the extra charges that consumers put on their cards during the season. Still, it should be a priority for consumers and it is probably a good idea to make sure that credit card purchases can be repaid completely at the end of the month even before consumers actually charge them on their cards. According to FICO, just one single late payment can already pull down a consumer’s credit score by 90 to 110 points if he has a credit core of around 780 and 60 to 80 points if he has a score of around 680.