With the passing of the New Year, and now the month of January, you’ve probably received most of your credit card bills from November and December, so you probably know just about how much you spent on Christmas. But, have you checked the impact of those new credit card balances on your credit score?
Unfortunately, when your credit usage rises dramatically (like it does when you spend a lot of money on Christmas gifts), you’ll often see a drop in your credit score beginning around the first of the year and continuing until you get those credit cards paid back down to their pre-Christmas shopping levels.
While this little dip doesn’t hurt much, it actually can affect the interest rate that you’ll get on that new home, new car, personal loan, or even just a new credit card that you’re considering. And over time, a higher interest rate on any type of loan or credit line can cost you a significant amount of money.
So, your best bet is to ALWAYS consider the effect a few points on your credit score can have on your overall financial picture. And the best way to do that is to ALWAYS know about where your credit score is.
These days, that information can be found just about anywhere, but here’s where you might want to start: