Arranging events for the arrival of a new baby is exciting, but you may need to face some significant financial changes. If you’ve recently taken your new bundle of joy home or are waiting for someone on the way, you can’t afford to drop your credit score.
Here are a few techniques to help you ensure your credit score doesn’t fall:
- Automate bill payments: Whether it is paying medical bills or making your credit card payment, almost all financial responsibility goes backwards in the first few months after the arrival of your newborn. Ignoring timely payment of bills or credit cards can have a direct impact on your credit score. However, this problem can be easily handled by switching to automatic bill payment long before the baby arrives.
- Purchase supplies when required: Most parents want to buy items like diapers and clothes for their newborn, but they need to remember that babies have a fast growth rate. Your baby can quickly grow out of their clothes right after wearing them once or twice. So it is advised that parents take proper planning to avoid unnecessary purchases that put them at risk of serious financial problems.
- Avoid seeking more credit: Stay away from seeking extra credit, such as applying for a new credit card. This kind of spur to the moment decision can become a terrible idea, especially for parents without the means to increase their income. Applying for extra credit creates extra financial responsibility for new parents and this can quickly end up as a bad financial decision.
- Use Cash-Back Rewards: A rewards credit card is a very useful tool for any new parent who likes to earn cash back or points on their most purchased items. You can save a lot from a large cash back or point system purchase that many credit card companies offer. For example, if you have accumulated a few hundred dollars in cash-back rewards, you can easily use that money to make other significant purchases.
- Set priorities: One of the best ways for new parents to prevent a financial crisis and the risk of damaging their creditworthiness is to set their priorities. You need to know how to distinguish between what is an “absolute need” and what is a “want” for your child. You also need to order your priorities based on the resources available to you, without risking your credit value.
By following these tips, you can avoid experiencing the baby flare when it comes to your credit rating management.