This is the year you’re finally going to do it. You’re going to get in shape! You’re going to cleanse your body of toxins! You’re going to volunteer and really, genuinely help others!
New Year’s resolutions are pretty common, with 45% of Americans usually making them, according to research published by Statistic Brain. Unfortunately, that same research shows that only about 8% of folks successfully keep their resolutions. So, before you go spending a ton of money on something you’re probably going to – and let’s be honest here – fail at, consider how it could negatively impact your credit.
1. Losing Weight/Getting Fit
Thinking of joining that really awesome gym down the street? It’s easy to set up your health club membership dues to be automatically billed to your credit card, but if you aren’t routinely going to the gym, and say, for example, your credit card expires, that monthly charge can “bounce” and you might not find out about it until it ends up as a negative item on your credit reports.
Instead of setting up a recurring charge you could easily forget about, consider getting a monthly statement sent to you. Seeing that monthly bill might even provide some extra incentive to get you to the gym too.
2. Eating Better
It’s so great that your friend lost all that weight juicing, and her $500 juicer is just amazing. You want one! Now!
However, instead of putting it on your credit card and paying the balance off over time, it might make more sense to save for the juicer instead. Carrying debt isn’t necessarily a bad thing, but carrying excessive debt on purchases you rarely or never use can negatively impact your credit. Using more than 30% of your available credit can hurt your credit scores, and using less than 10% is ideal.
3. Helping Others More
If helping others is on your list, by all means do good deeds, volunteer, but try to steer clear of co-signing loans if you can. It’s easy to assume you’re just doing a good deed to help a friend or family member, and may even mistakenly believe it’s a simple, one-time event. But when you co-sign a loan, it will be on your credit report. In the event that the primary borrower makes a late payment, or worse, go into default, it will impact your credit score.
By all means, make those New Year’s resolutions if you must, but keep maintenance of your credit score at the top of your list. You can monitor your credit by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com. A significant drop in your scores, say more than 25 or 30 points, is an indication that something is wrong. You can establish a good credit score by making all of your payments on time, keeping balances low and limiting credit inquiries.
More on Credit Reports & Credit Scores:
- The Credit.com Credit Reports Learning Center
- How Do I Dispute an Error on My Credit Report?
- How Credit Impacts Your Day-to-Day Life