It seems like the worst time of year to clean up your credit. But the holidays offer surprising opportunities to polish your record, boost your score and become more credit-savvy for 2010.
- Say NO to store cards. The lure of 15% off at the register is tempting—and terrible for your credit. Every credit inquiry dings your score. That's not what you want for Christmas.
- Spend more cash. A big part of your score is how much credit you have available. If you carry a balance, it should be less than 25-30% of your available credit. Spending cash this season will help to keep your debt ratio down—and nudge your score up.
- Clean house for the New Year. It's almost 2010, have you looked at your credit reports yet? They're free at the official website, www.annualcreditreport.com. The majority of reports contain errors, so a quick clean-up (you can submit disputes online) is the fastest way to better credit, and a financially happy and healthy New Year.