Reduce your debt and improve your credit score in the process

Debt is the most evil thing that can distroy your finances. So, lowering your debts is very   important to rebuild your credit score. If you have high debt, it hurts your score as high debt levels shows that your credit usage is close to your credit limit. This results in lowered credit score. Moreover, if you have high debt levels at some point of time you may have problems in going on making the payments on your debts. So, if you have several debts with high interest rates you can opt for credit card consolidation and become debt free.
Improving your credit with debt pay off
You can eventually improve your credit score with debt payments. It is always important for you to maintain low debt level. If you have high debt levels, then as said above, it hurts your credit. This is because, high debt means higher credit usage and if your credit usage goes close to your credit limit or exceeds it, it will obviously hurt your credit score.
Other than that, the creditors generally increase the interest rate on your credit card if you tend to carry high balances on that. It is always advisable to carry 30% balance against the credit limit.
In addition to this, when you are making payments on your credit cards, you are lowering the debt amount. Now, this too helps in improving your credit score. This is mainly because, payment history is important for your credit score. That is, your payment history accounts for 35% of your credit score.
If you have several credit cards, and if the interest rates on these are too high for you to make the payments, you can opt for credit card consolidation. This helps in lowering the interest rate on your credit card debt and also reduces the number of debts. Thus, it becomes easy for you to make the payments. So, credit card debt consolidation too helps in improving your credit score. Unlike debt settlement, debt consolidation does not require you to miss payments on your credit cards before the consolidation. Thus, the question of lowered credit score does not arise, rather it helps in credit score improvement.
Other than this, when you will make the payments, you can even repair your credit and in the process improve your credit score. That is, before making payments on your credit card, if you had missed payments on it, you can negotiate a Pay for Delete or PFD with the creditor. This can help you to improve your credit score as the negative listing will get removed from your credit report. Pay for Delete or PFD is that agreements through which you are able to remove the negative listings from your credit report.
In addition to this, you will have to remember that while making the credit card payments to become free of debt to to bring down the debt level, you will have to lower the usage of your credit cards. This is important so that you do not incur additional debts. Otherwise the debt cycle will go on and on and you may never be able to either become free of the stress of debt or even improve your credit score. 
Why is good credit score important?
It is really important for you to maintain a good credit score and a clean credit report. This is because, good credit score is essential for you to get any mind of new credit like credit cards o mortgage or car loans or may be personal loan. Even your employer is going to check with your credit score and your credit report to find out how much responsible a person you are and then offer you the job.
So, try to pay off your debts and lower your expenditure in order to bring down the debt level, thereby improving your credit score. 

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