Diwali is the season of shopping, gifting, and celebration, but big festive purchases can sometimes put a strain on your finances and impact your credit score if not managed carefully. With credit cards, personal loans, and EMI options widely available, it’s important to spend smartly while maintaining good credit health.
1. Stick to a Budget
Festive excitement can lead to overspending. To protect your credit score:
Set a clear spending limit for Diwali shopping.
Avoid maxing out your credit cards, as high utilization can lower your credit score.
Allocate funds across gifts, clothes, sweets, and home décor without stretching beyond your means.
Tip: Aim to keep credit utilization below 30–40% of your total credit limit.
2. Pay Credit Card Bills on Time
Late payments are one of the biggest threats to your credit score.
Clear your credit card bills before or on the due date.
If using multiple cards, prioritize paying off high-interest balances first.
Consider setting up auto-pay to avoid missing deadlines during the festive rush.
3. Use EMI Options Wisely
EMIs make big-ticket purchases manageable but can impact credit if mismanaged:
Don’t take EMIs for all purchases; focus on items you genuinely need.
Avoid splitting EMIs across multiple cards if it increases overall debt.
Track upcoming EMIs to ensure timely repayment and avoid defaults.
4. Avoid New Hard Inquiries Unnecessarily
Applying for multiple credit cards or loans simultaneously can trigger hard inquiries, which may temporarily reduce your credit score.
Apply only for credit that is absolutely necessary.
Space out applications to maintain a healthy credit history.
5. Monitor Your Credit Score Regularly
Use official credit bureau portals or banking apps to check your credit score.
Early detection of errors or overspending helps you take corrective action before it affects your financial profile.
Track your credit report to ensure timely reporting of payments during the festive season.
6. Tips for Safe Diwali Shopping
Plan your purchases early to avoid impulsive spending.
Use cashback, rewards, and festive discounts to reduce cost without borrowing excessively.
Avoid borrowing more than you can repay within the stipulated EMI or credit card cycle.
Maintain an emergency fund for unforeseen expenses.
Final Thoughts
Diwali is a time for joy, but overspending or mismanaging credit can have long-term consequences on your financial health. By sticking to a budget, paying bills on time, using EMIs wisely, and monitoring your credit score, you can celebrate the festival of lights without financial stress and keep your credit score intact.
Frequently Asked Questions (FAQ)
1. Can big Diwali purchases affect my credit score?
Yes. High credit card utilization, late payments, or missed EMIs can negatively impact your score.
2. How much credit utilization is safe during Diwali?
Try to keep credit utilization below 30–40% of your total credit limit.
3. Are EMIs safe for credit scores?
Yes, as long as you repay on time. Missed EMIs can harm your credit history.
4. Should I check my credit score before Diwali shopping?
Absolutely. Monitoring your score helps you plan purchases and manage credit wisely.
5. How can I maintain a good credit score during festive spending?
Pay bills on time, avoid over-borrowing, limit new credit applications, and track your credit utilization.
Published on : 6th October
Published by : SMITA
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