Preparing Your Finances & Credit for Holiday Shopping

Preparing Your Finances & Credit for

Holiday Shopping 

Over the last few weeks, I've seen several articles, both in print and online, suggesting ... that if you plan on doing holiday shopping this year ... you should start and complete it early.  The sooner the better.  If you wait until Thanksgiving, Black Friday, or Cyber Monday, you may be a disappointed shopper.

This is especially true for those hoping to buy trendy or popular items as a gift.  Supply chain issues, a shortage of workers, re-stocking concerns, manufacturers' availability, and delivery challenges are the main reasons noted as to why this shopping strategy is recommended.

As if all of those concerns are not enough, financial worries may enter into the festive season.  Not surprisingly, holiday shopping can negatively impact your family finances.  

And while that may be true every year, this year it could prove particularly challenging for some families.  So establishing rules for this year's holiday shopping, in particular, is very wise. 

How do you go about doing that?  Planning how and where you shop is a good strategy and place to start.  

Compile a list that includes:

• A Budget:  What is the total dollar figure you have to work with?
• Names:  Who will you want/need to buy gifts for?
• A Breakdown:  How much of that allotted budget will you spend on each individual gift recipient?
• Gift Ideas:  What ideas fit the planned expenditure for each gift recipient?   

Why do I stress this?

As a loan officer, I've read each of my mortgage applicant's credit reports and seen their bank account(s).  Far too often, holiday-related expenditures have contributed directly to their ongoing financial and credit challenges.  

Both their credit report and bank accounts speak to this being the case.  Each provides an accounting and reads like a timeline of the applicant's spending activities and credit actions.  

Often, credit cards applied for during the holiday shopping season are revealed within a mortgage applicant's credit report. 

Those very same credit cards result in financial/credit stumbling blocks as the added debt and resulting lower credit scores contribute to their financial and credit challenges.  In fact, inquiries alone can impact credit scores lower, even if no debt results.

Unfortunately, what they did not know or forgot at the time they applied for the new holiday credit card was this:  These promo credit cards immediately (and almost always negatively) affect credit scores.  The very same credit scores they are reliant upon for mortgage approval.  

And sometimes that dip in credit score is just enough that mortgage approval may be denied them.  Or at minimum, their application and approval will have to wait until their credit scores rise again.

So as a result of this, heading into the upcoming holiday season, I recommend that you just say "NO" to new credit offers unless one of the following applies: 

• You know for a fact that your Credit/Credit Score can withstand a new credit inquiry
• You can handle the new debt caused by a new credit card
• You can make monthly payments on time, consistently, and faithfully
• You will NOT be making application for a mortgage
• You are NOT already in the mortgage process
• You are NOT hoping to buy a home in the near future
• You are NOT maxed-out on present credit cards
• You have NOT already applied for other stores/credit cards
• You know ALL the terms of the new credit account associated with the offer
• You know what other credit obligations you have and the total of ALL your debt
• The "enticement" offer is so valuable it offsets the negatives of taking on more debt
• You have NO credit history and are trying to establish one for a future home purchase

Sharpen your resolve.  Say and repeat the word, "NO!" if offered new credit, unless you fit one or more of the above.  After the Holidays are over, you'll be very glad you did.  

No matter your future plans and goals, but especially if you hope to buy a home soon or at some point down the road, you'll be so glad that you established and stuck by the holiday shopping rules you set.  Your overall budget will remain intact and your credit report and scores will prove advantageous to meeting your financial goals.

The advice offered above regarding this year's upcoming holidays and holiday shopping is timely and well-warranted.  Implement it along with the financial tips provided here and your holidays ... and those of the people you love and care about the most ... will be bright.  

So will your financial prospects and future ...

Are you hoping to Construct, Buy, Refinance or Purchase a home or investment property in  Chicagoland or elsewhere in Illinois or Wisconsin?  Looking for mortgage financing answers, options, solutions, and experienced assistance?

Contact me!  I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Originator -NMLS #216987 - IL Lic. 031.0006220 - WI Licensed

American Portfolio Mortgage Corp

NMLS #175656


Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
www.genemundt.com
gmundt@goapmc.com





 


              
   



      Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including: 
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