How to Protect Your Credit Score as a New Parent

Having a baby is a wonderful experience but it’s also very costly. If you’re a new parent, getting your finances in order may not be your top priority, however, it’s important to consider the impact a new baby will have on your finances. Purchasing baby clothes, nappies and bottles can all mount up and before you know it, your credit score has been dented. Protect your credit score as a new parent by following these steps.

Set up direct debits

Life is going to be hectic in the first few months with a newborn. Juggling visitors, appointments and other things alongside a lack of sleep means payments may be missed. Instead of trying to think ahead when making payments, set up a direct debit for each lender to make your payments on time and keep your credit score intact. You’ll have one less thing to worry about and your credit score won’t suffer in the process.

Set a budget

Forget about your old budget. Having a new baby can mean your outgoings go way beyond what you initially intended. While a newborn is expensive, purchasing baby supplies and arranging childcare doesn’t need to be beyond your means. Once your baby has arrived, sit down and create a realistic budget, taking into account what you need to buy each week, as well as your incoming funds and other outgoings.

Only apply for new credit if you need it

While it can be tempting to apply for credit to cover big purchases like a cot and pram, only apply for new credit if you really need it. Unused credit can affect your credit score negatively, while applying for too much credit at once can also have a negative impact. Write a list of all purchases you require and set a strict budget for each one – you’ll know how much credit (if any) you’ll require. If you’re searching for new credit, try looking for one with low interest – some lenders offer zero percent interest on new purchases for a limited amount of time.

Check your accounts

Check your accounts regularly to ensure that no unconfirmed purchases are being put on your credit or store cards. Fraud can occur at any time and while you’re undoubtedly busy with a new baby, spending five or ten minutes checking your accounts every month can be worthwhile.

Don’t put small purchases on credit

Small purchases like a few groceries at the local supermarket may not seem like much but they can add up over time. Instead of using a credit card for goods like food and toiletries, ensure you only use cash or your debit card – this will prevent your credit card bills soaring as well as protecting your credit score.

Make additional payments

If you’re in a position to make additional payments, reducing the amount of credit you own will protect your credit score. Making an extra payment per month will help to significantly reduce your debt and put you in good stead for future purchases, such as buying a house or car.

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