How to Pay Down Credit Cards to Boost Credit ScoreWhen it comes to your credit score, carrying high credit card balances can have a negative impact. Having a high debt-to-credit ratio makes up about 30 percent of your overall credit score while revolving debt (credit cards) weigh heavier than any other outstanding debts such as mortgages, student loans, or car loans. If you have multiple maxed out credit cards, chances are your credit score is extremely low, which can significantly impact your future loans.

Here is a guide to paying down your credit debts as soon as possible in order to boost your credit score:

1. Balance Transfer Credit Cards

If you have multiple credit cards with outstanding balances, one of the best and easiest ways to pay down the debt is to consolidate the debt into one account. Balance transfer credit cards offer those in debt the chance to succinctly combine their debt into one low-interest payment.

Jeffrey Weber of states, “Using a balance transfer credit cards gives credit users a chance to maintain their credit standing while getting ahead of their debt. These credit cards offer a low interest rate, which can ease the strain the debt.”

Additionally, many balance transfer credit cards have a free transfer fee or are free for the first year, which in the long run can help credit users pay down their debt much quicker, resulting in a higher credit score quicker than other methods.

2. Snowball Method

Another manner to pay down debt efficiently is to use the snowball method. In essence, for the method to work, you start with one payment and pay as much as you can over the minimum balance until the debt has been paid. When you move to the next debt, you pay the same amount you were paying on the old debt plus the new debt’s minimum balance.

This is an excellent way to remove yourself from debt; however, if you are looking to immediately improve your credit score, this technique might not be the best tactic. Instead, you should consider evening out your credit card balances.

3. Debt-to-Credit Ratio

Your credit report is scored by both your overall debt-to-credit ratio and your individual debt-to-credit ratio of your other revolving debt accounts. For example, if you have a credit limit of $5,000 and you have charged $4,500, your debt-to-credit ratio is high, and lenders will be wary of granting you further loans. When it comes to lowering your debt-to-credit ratio or evening it out, start with the highest debt-to-credit ratio and begin paying them down from there. Because you are improving your individual debt-to-credit ratios for each of your credit cards, your credit score will improve more quickly.

4. Spread it Around

Another option is spreading your debt between credit cards, which, in a pinch can work. However, you don’t necessarily want to open new credit cards for the sole purpose of evening out your debt-to-credit ratio. If you cannot evenly disperse the balances on your existing cards, but need an immediate credit boost, your best bet is to use the balance transfer method.


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