Living with credit

How a holiday temp job can boost your credit

Susan Johnston Taylor

Trees have barely begun to shed their leaves for fall, but retailers are already hiring armies of additional workers for the holiday retail season.

Target announced plans to hire 70,000 seasonal workers in its stores (same number as last year), UPS plans to hire 95,000 seasonal workers to help with package handling and drivers (up from 93,000 last year), and Macy’s is planning a holiday hiring event on September 30 to help it attract 83,000 workers (roughly the same as last year).

While hiring for store employees is essentially flat compared to last year, Fortune predicts that the real opportunities for holiday workers will be at retailers’ warehouses rather than brick-and-mortar stores. Amazon, for example, hired 100,000 holiday helpers at its warehouses in 2015 (figures for this year are not yet available).

If you’re considering a part-time job, here are three ways you could use that extra cash to help with holiday expenses and improve your credit.

1. Milk the employee discount to minimize holiday debt.
Discounts vary by retailer, but many offer a hefty discount to employees, including seasonal ones.

Sayzie Koldys, a writer/teacher in Portland, Maine, who had a fall-to-holidays job at Lululemon Athletica several years ago, says she used the generous employee discount to amass a new workout wardrobe worth thousands of dollars for a fraction of the retail price.

This year, she hopes to get a part-time holiday job working at L.L. Bean, so she can use the employee discount to slice a bit off the cost of presents for family and friends.

If you’re employing this strategy, just don’t use the discount as an excuse to overspend and take on more credit card debt, even at a discount!

2. Stash extra cash as a down payment.
If you’re planning to buy a car or a home in the new year, then a part-time job could help you save for a down payment — and boost your credit score.

A car loan or mortgage improves your credit by diversifying your credit mix, which makes up 10 percent of your FICO score. Responsibly managing revolving credit (credit cards) and installment loans (car or mortgage payments) can show lenders that you know how to handle both.

A decent-sized down payment also will help keep your monthly payments manageable and could help you qualify for better loan terms. So by saving a chunk of your holiday temp pay — whether you’re filling orders at a warehouse or working a register at a store — you may be able to reduce your costs in the new year and beyond.

3. Use extra cash to pay down balances.
If you’re already carrying a credit card balance, making additional payments using your paycheck from a part-time holiday job could help you get out of debt faster.

That’s another one of Koldys’ strategies. She’s planning to use her pay as a holiday helper to keep from getting any deeper in debt.

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