Paying Down Debt to Improve Credit

By Chandler Sullivan
April 28, 2022 | 2 Min. Read

Everyone will come across debt at some point in their lives. Whether it is student loans, credit cards, car loans, mortgage loans, etc… the list of debt is endless at any given moment.

When you have a lot of debt it restricts your disposable income and ability to save or spend. Having debt can be very overwhelming… especially if you have a low credit score. Paying down your debt can help your financial future by improving your credit and decreasing your stress.

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How to Pay Down Debt

It is important to consider a savings plan or budget when it comes to starting to pay down debt. What can you afford to pay off every month while not sacrificing your necessities? The easiest way to set up this plan is to pay down the smallest balance and highest interest rates first.

  • Pay off smallest balance first: It will be easier to eliminate your overall debt if you prioritize smaller debts first. Of course, don’t neglect payment on your larger debts but give the smaller debts the most attention. Once the smallest debt is paid, focus on the next smallest debt.
  • Pay off highest interest rate: Making minimum payments on lower interest rates will free up your ability to make larger payments on higher interest rates.

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