How Paying Off Debt Can Help Repair Your Credit (and Improve Your Credit Score)

How paying off debt can help repair your credit and improve your credit score.It’s perfectly normal to be worried about your credit score. After all, you’re constantly told that having a good credit score is important for a huge variety of reasons, and it’s a point of pride for many people. So what do you do when your scores are sinking like the Titanic because you’ve hit the “debt iceberg?”

Instead of letting your credit score sink to the ocean floor, or paying people to do credit “repair”, there’s a simple solution that will greatly benefit both your credit AND you: focus on paying off your debt.

Making consistent, on-time payments that reduce your balance is a surefire way help repair & improve your credit score.

What is a credit score, and how is it calculated?

Before we get into why paying off debt works to help repair your credit, let’s talk about the kinds of things that make up a credit score. It’s important to know that to understand just how paying off debt can help.
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The Debt Avalanche Method Explained

Wondering what the debt avalanche method is and how it works? It's all explained here.Wondering what the debt avalanche method is, and how it works to get you out of debt?

In short, the term “debt avalanche” describes the order you pay down your debt in, and that order is based entirely on the interest rates you’re being charged. (A debt avalanche is sometimes also known as “debt stacking”.)

Here’s why you might (or might not) want to use a debt avalanche to pay down your debt.

Details of how the debt avalanche works

A debt avalanche works like this: you make a list of all your debts and then place them in repayment order from highest interest rate to lowest interest rate, regardless of the amount you owe on each one.

While you do make minimum payments on all of your debts, you focus hard on paying off the debt with the highest interest rate first, proceeding on down your list until everything is repaid. The only thing that changes over time is the amount you pay toward the debt at the top of your list.
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How to Build a $1000 Emergency Fund in 90 Days or Less

How to build a $1000 emergency fund in 90 days or less.“Your house needs a new air conditioner,” they said. I couldn’t believe it, or afford it if that were true. So I roasted in the 105+ degree Phoenix heat while I saved up $35 for a second opinion. (Yeah, I was pretty broke, and determined not to borrow.)

If only I’d known then what I know now about saving up money fast. I’d have had at least a $1000 emergency fund to draw from like I do now. If you’d like savings to fall back on too, this article walks you through exactly how to build a $1000 emergency fund in 90 days or less.

Step 1: Let go of any limiting beliefs.

If you already believe it’s possible to save up $1000 in 90 days or less, you’re starting off from a great place and can skip to step 2. But if you have any doubts or find yourself thinking “oh but I can’t do that because ______”, read on.

Trust me, I know what it’s like to be struggling to make ends meet. I tried and failed to save a single dollar for the longest time, feeling like a loser when I’d withdraw it. But it is possible for things to change, and get better so that you can save. Believing that and getting rid of the “can’ts” is the first step.

If you catch yourself thinking or saying “I can’t because….”, tell yourself “stop!” instead. (Out loud even!) Then reframe it to something you can believe. That might be, “I may not see how I can save up just yet, but I’m getting closer to making it happen every day.” Or “I’m not going to dwell on that. Right now I’m going to focus on finding ways to do it anyway.” (Then mentally change the subject.) Work on that while you go on to step 2.
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How We Paid Off $17,000+ in Student Loan Debt in 54 Days

Money can be emotional. Few experiences compare to the joys of earning a long-awaited promotion or receiving a raise. Sometimes those experiences teach us that the grass isn’t always greener on the other side. I learned this lesson the hard way.

In June 2015, I earned a promotion as a public school administrator. Two weeks later, my wife, Megan, secured a new job as a teacher in the same school district. Our new jobs came with significant raises. I thought we had it made.

Before starting our new jobs, my wife and I celebrated with a vacation and spent a week basking in glory. Life finally seemed perfect.
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