Keep the holiday season from hurting your credit score

KNOXVILLE, Tenn. (WATE) - With the Christmas shopping season here, buying a bundle of things with your credit card could affect your credit score.

Seeing your credit score drop is rarely a laughing matter. A low credit score could prevent you from getting a decent loan.

If you buy jewelry for your sweetheart, the clerk will offer a 15 percent discount if you sign up for a store credit card. Those sign-up bonus may look great, but the credit card company almost surely will do a "hard pull" on your credit report to check your creditworthiness. And when that happens, your credit score will dip which could affect your borrowing strength.

With the holidays upon us, many will pack on the pounds during those year-end festivities and will wake up in January with bulging waistlines as well as a newfound determination to join a gym and start exercising. Unfortunately, many give up after a few weeks and don't return. Failing to pay your obligation, as stated in the gym contract, and the fitness club could send your account to a collections agency, which in turn could eventually result in a dent in your credit score.

If possible don't fail to pay your electricity or water bill. Your credit score might take a hit, if you are unable to pay, according to the Consumer Financial Protection Bureau. Most utility companies do not report to the big three consumer reporting agencies whether or how regularly you pay on time. However, if you fail to pay a bill and it is sent to a collection agency, that debt could show up on your credit reports from any of the big three credit reporting agencies, Equifax, Experian and Transunion

If you are behind on paying your income taxes, the good folks at TurboTax will remind you, failing to pay a large tax bill could end up hurting your credit, and worse, if the IRS files a tax lien in court: A tax lien can give the federal government a legal claim to every asset you own, including your home, your cars, or other property. If it reduces your credit score, it can become more difficult for you to obtain credit in the future.

Under the heading of "no good deed goes unpunished" is a decision to close a credit account that you no longer use. This sounds sensible, even downright responsible. Close the account, and you no longer can ring up debt with it. However, closing a credit card account means the total amount of credit available to you will drop. And when that happens, your credit score will fall too, according to the Consumer Finance Protection Bureau.