Tips to help you recover from lingering debt

The holidays are long gone, but for many people, the bills racked up during the season are still lingering. If you aren't diligent about paying down the balances, those leftover holiday expenditures could really hurt your ability to meet your financial goals for the year.

By allowing outstanding holiday debt to linger for months (or longer) on your accounts, you run the risk of reducing your credit score, which can significantly impact your ability to get the best loan rates or access to other lines of credit.

Maxine Sweet, vice president of public education at Experian, the leading global services information company, offers some tips to help consumers manage the holiday debt "hangover" and take proactive steps to help improve their credit and use it wisely.

Assess your overall financial situation.

Before you do anything else, it is important to examine your entire financial situation, including your monthly budget and your short- and long-term financial goals. Make a list of all of your debts, payment due dates, minimum payment amounts, interest rates and the timeframe in which you would like to pay down your debt. Don't forget to consider the other financial goals you may wish to accomplish.

Select a payment strategy that works for you.

Consider paying down the credit cards with the highest interest rates first. If that seems too daunting, try paying down your smallest balance first so you can see your progress toward eliminating your bills right away. Pay more than the minimum payments, if you can, but most importantly - always pay on time. If you need additional help managing your debt, you might consider reaching out to an accredited credit counselor such as a member of The National Foundation for Credit Counseling (www.nfcc.org/).

Stop spending frivolously.

While it may sound simple, an important step is to curtail unnecessary spending. Put yourself on a financial diet and try not to spend money on non-essential items until you catch up on any extra debt you incurred during the holidays. Using coupons and comparison shopping for essential items and cutting extra expenses can really make a big a difference in your monthly budget. In fact, simple lifestyle changes can help you save thousands of dollars over the course of the year. The money you save can help pay off debt or be saved for next year's holiday shopping.

Check your credit score so you have a benchmark for improvement.

It is important to know where your credit stands after the holidays. Check your credit report and purchase a credit score so you understand the baseline of where you stand and how your credit may have been impacted by your holiday spending. During times of high activity on your credit accounts, it is also especially important to make sure that your credit report is accurate. Then, after you have had time to achieve your goals and pay down your debt, get another score to see how where you fall in the range of risk has changed once you have paid down your debt.

Knowing where you stand after you have paid off your debt from the holidays can leave you on the right foot for future purchases. For more credit information, visit LiveCreditSmart.com.