The holidays are upon us once again, and for many of us, 'tis the season for a bit of indulgence. Both at the dinner table and the cash register, the holidays can mean overdoing it a little bit. Like those extra calories we’ll have to work off in the gym, we may have some spending missteps to attend to as well. No one wants to start the new year with a few unwanted pounds, and no one wants to start the new year with unintended credit problems.
As we know, the holidays are a time for giving and receiving gifts—and shopping! In fact, according to the National Retail Federation
, up to 30 percent of annual sales take place during the holidays. The malls this time of year can be downright frenzied, leading to issues like overspending and theft.
With so much retail activity now taking place online, that theft can turn to identity theft, which can have a profound negative impact on your life and finances.
The best answer to avoiding holiday spending mistakes is prevention. Before the holidays, follow these steps for financial safety:
- Set a budget for what you intend to spend, and ensure that budget is reasonable for your current financial situation.
- Be careful sharing your personal information.
- Avoid opening up any new accounts going into the holidays. New accounts and the additional available credit can increase the temptation to overspend. Opening new accounts can also have a negative impact on your credit score.
- Watch out for old-fashioned theft of your purse or wallet. It’s a bit old school compared to elaborate, online phishing schemes from some foreign hacker, but it’s one that unfortunately never goes out of fashion.
If you’ve done all you can to prevent a holiday mishap, and something still happens, then what?
First, contact the creditors directly for the affected accounts. They’ll close that account and open a new one for you, as well as work with you to remove fraudulent activity.
Next, pull your credit reports and ensure there has been no damage there. If you haven’t pulled your credit reports in the last 12 months, you can actually get them for free. The Annualcreditreport.com
site is set up by the three major credit bureaus
: Equifax, Experian and TransUnion. Make sure you get a report from each bureau because the information can vary among the three.
You'll want to look for the following:
- New accounts opened without your knowledge.
- Balances on accounts that seem unreasonably high.
- Changes to your personal information.
While you're looking over your credit reports, look for any other errors from the past. This is a great time to catch those too and address them. Errors on your credit report will likely affect your credit score and negatively impact your ability to get credit.
What do you do if you find errors on your credit report? You can either enter the disputes with the three credit agencies yourself, or use a professional credit repair firm. A major advantage of using a good credit repair firm
is that they can often expedite the process of getting errors removed from your credit reports. They know how to communicate with the credit agencies and have a proven, systematic approach for working through the dispute process.
A reputable credit repair firm can advise you about what negative items can most readily be removed from your reports and which might be more intractable. The ability of a credit repair firm to help improve your credit report will vary quite a bit based on the quality of firm. Best Company
is an excellent resource for researching credit repair agencies.
The better agencies will be able to help with the following issues on your credit report:
- Late payments
- Charge offs
- Personal identification changed or corrected
- Closed accounts
- Negative settlements
Whether you do it yourself or use a professional service, it’s important to protect your good credit, especially during the holidays!