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Silly season spending habits that can harm your credit score

Helpful Money Tips

Our wallets can really take a hit at Christmas. Between end of year celebrations, Christmas shopping and sales season, it’s easy to spend up a storm if you aren’t careful.

But your bank account isn’t the only thing that can be impacted during the holiday period. Your credit score can also take a hit if you let your sensible spending habits lapse.

Down the track, if you decide to apply for a loan or credit, then one of the first things lenders will look at is your credit score.

If your score isn’t quite up to scratch, you might find your finance application gets rejected.

Read on to find out some of the silly season spending habits that can hurt your credit score. But don’t worry, it’s not all doom and gloom, we finish up by sharing how you can actually improve your credit score too.

Credit Score Dangers

Relying too heavily on buy now pay later

If payday is a couple of weeks away, buy now pay later (BNPL) can be a tempting way to cover the cost of Christmas in the meantime.

But BNPL can also be sneaky. You don’t need a credit check to sign up but if you end up running into trouble, BNPL services can report you to credit agencies. When this happens, it will show up as a negative listing on your credit report and in turn drag down your score.

Shopping up a storm on your credit card

Last year Aussies ended up with a national post-festive debt hangover of $29 billion. This works out to be $1,727 in purchases per card on average.

Poorly managed credit card debt will negatively impact your score. Rethink spending up big at the sales or footing a group bill because missed payments will inevitably harm your score.

Find out how a personal loan is easier to manage than a credit card.

Forgetting your bills or repayments

Many Aussies go away over the Christmas break. This means that bills or repayments can be forgotten about for long periods of time.

If you do miss a repayment, try to repay them within 14 days so your credit score isn’t impacted. If you don’t catch it up, eventually it could turn into a default and this will seriously damage your credit score.

Defaults hang around on your credit report for up to five years and aren’t favourable in the eyes of lenders, especially if they remain unpaid.

If you are heading away over the Christmas break, make sure you schedule automatic payments to cover your bills and mortgage or rental payments while you’re away. This way you won’t end up with a nasty surprise in the letterbox upon your arrival home.


Heading to the races or casino won’t harm your credit score, but these events often go hand in hand with overspending.

Placing the odd bet may be relatively harmless but racking up numerous gambling debts will inevitably drag your credit score down.

Problem gamblers will often fund their habit with multiple credit cards, all of which will appear on your credit report. Plus, gambling transactions are often charged as cash advances, which attract a much higher interest rate than standard transactions and also come with a cash advance fee.

Consequently, if you’re unable to repay your credit card balance on time, your interest charges start to increase, trapping you in a debt cycle which can be hard to break. Therefore, if you’re planning on having a Christmas flutter, please do so responsibly and ditch the credit card.

How can you actively improve your credit score?

In October 2019, Fair Go Finance become the first and only commercial small loan lender who implemented comprehensive credit reporting.

Comprehensive credit reporting can help customers who show good credit behaviour (such as making loan repayments on time) actively increase their credit score.

So far, we’ve already seen improvements in a number of our customers’ credit scores. Here are some examples:

A customer who’s made their Fair Go Finance loan repayments on time for the last 9 months has seen their Equifax credit score increase from 320 up to 431.

Another customer has seen their score increase from 508 to 626 after having made all their Fair Go Finance loan repayments and 3 other accounts.

So, if you’re looking for a small personal loan, in the long term you could be better off with a Fair Go Finance loan because if you’re consistent with your loan repayments, this good repayment history with us will actually help improve your credit score.

This can then lead you to getting access to better deals such as lower rates or greater access to credit.

How can I find out my credit score?

You can check your score with them for free here. Another leading Australian credit bureau is Experian (you can check you score for free with them here).

Remember, the best way to navigate silly season spending is to stick to a budget, use savings if possible and avoid using a credit card where possible.

Written by Bessie Hassan – a money expert at Finder