5 After the Holidays Moves Your Credit Score Will Thank You For

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The fun part of the holidays is over. Now it's January, and your credit card bill has arrived. It's time for the dark side of the holiday season — paying for all that December cheer. If you shattered your holiday spending budget, don't panic: Now is the time to take the steps that will not only improve your finances, but boost your all-important credit score.

Ready to put the overspending and impulse buying of the holidays behind you? Here are five post-holiday money moves that will give you a stronger credit score in 2017.

1. Pay on Time

You might not be able to pay off your entire holiday credit card bill at once. That's unfortunate, because credit card debt comes with high interest. But if you pay off a bit of the holiday debt every month on time, you will be helping your credit score.

The three national credit bureaus of TransUnion, Equifax, and Experian track your on-time credit card payments. If you pay your credit card on time each month, your score will improve. If you are more than 30 days late on a payment, your score will plummet, usually by 100 points or more. And this missed payment will remain on your credit report for seven years.

No one likes holiday debt. But look at it as a way to show the credit bureaus that you are responsible enough to make these payments on time. Doing so will do wonders for your credit score.

2. Do a Balance Transfer

Make a plan that will determine how long it will take you to pay down your current debt, and find a 0% balance transfer credit card that offers an intro APR for that amount of time. Some credit cards offer as much as 21 months at 0% financing. This can save you hundreds to thousands of dollars in interest, and help you pay off the debt faster. Do this only if you have a plan to pay off your debt completely within the intro period. (See also: What You Need to Know Before Doing a Balance Transfer)

3. Don't Close Unused Credit Cards

If you do pay off a credit card, congratulations! That's a great feeling. But don't close that account, even if you never plan to use your card. Closing unused credit cards will hurt your credit score. That's because of something known as your credit-utilization ratio. Your score will be higher if you are using less of your available credit. If you close a credit card, you will automatically be lowering the amount of credit available to you and increasing your credit-utilization ratio.

4. Order Your Credit Reports

TransUnion, Equifax, and Experian each keep a credit report on you. These reports list your open credit accounts, including credit cards, mortgages, student loans, and auto loans. They also list how much you owe on these accounts and whether you have made any late payments. The reports also list any bankruptcies that are up to seven or 10 years old, and any foreclosures that are up to seven years old.

You can order one report from each of the three credit bureaus at no charge from AnnualCreditReport.com. Do it. Then check over your report for any potential mistakes. If you find errors, notify the offending bureau by email. Correcting mistakes can provide an immediate boost to your credit score. And even if you don't find any errors, it's always good to know exactly what kind of information the bureaus have about you.

5. Make a Household Budget

If you want to avoid overspending again next year, and avoid running up the kind of credit card debt that can hurt your credit score, draft a household budget this year. A budget doesn't have to be complicated to be effective. List your monthly revenues and your monthly expenses. Be honest about what you typically spend on items that can fluctuate each month, such as groceries, dining out, and entertainment.

Once you have these numbers, you can budget how much you want to spend throughout the year on gifts, decorations, and food for all of the big holidays, not just those that roll around each December. Armed with a budget, your odds of not overspending will increase.

Now that the holiday season is over, it's time to change your charging habits. Only charge what you can pay off in full each month. If you want to charge a flat-screen TV, make sure you have enough money saved up to pay it off in full when your next credit card statement comes due.

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