How to Improve Your Credit Score While Paying Off Debt

Understanding Credit Score Factors

Your credit score is calculated based on five main factors. Understanding these helps you improve your score while paying off debt:

1. Payment History (35%)

The most important factor is whether you pay bills on time. Even one late payment can significantly hurt your score.

2. Credit Utilization (30%)

How much of your available credit you're using. Keeping balances below 30% of your credit limits helps your score.

3. Credit Age (15%)

The average age of your credit accounts. Older accounts help your score, so don't close them.

4. Credit Mix (10%)

Having different types of credit (credit cards, loans, mortgages) shows you can manage various credit types.

5. New Credit (10%)

Opening too many new accounts in a short time can lower your score temporarily.

Strategies to Improve Credit While Paying Debt

1. Always Pay On Time

Payment history is the biggest factor. Set up autopay for minimum payments to ensure you never miss a payment, even if you're focusing extra money on debt payoff.

• Set up autopay for all minimum payments
• Use calendar reminders for due dates
• Pay at least the minimum, even if you're paying extra elsewhere
• Consider paying twice monthly to reduce interest

2. Reduce Credit Utilization

As you pay down credit card debt, your utilization ratio improves, which boosts your credit score. Aim to keep utilization below 30%, ideally below 10%.

• Pay down credit card balances first (they typically have highest rates)
• Keep balances low even after paying them off
• Consider making multiple payments per month
• Request credit limit increases (if you won't use them)

3. Keep Old Accounts Open

Don't close credit cards after paying them off. Closing accounts reduces your available credit and shortens your credit history, both of which hurt your score.

• Keep accounts open with $0 balance
• Use them occasionally to keep them active
• Only close accounts with annual fees if necessary
• Consider product changes instead of closing

4. Don't Open Too Many New Accounts

While paying off debt, avoid opening new credit accounts. Each application causes a hard inquiry, which temporarily lowers your score.

5. Pay Down Debt Strategically

Use the debt avalanche method (highest interest first) to save money, but also consider paying down credit cards first to improve utilization.

Credit Score Improvement Timeline

Credit score improvements happen gradually:

• 1-3 months: Payment history improvements, utilization changes
• 3-6 months: Significant utilization improvements, score increases
• 6-12 months: Continued improvements, better credit mix
• 12+ months: Long-term improvements, better credit age

Common Mistakes to Avoid

1. Closing accounts after paying off: Hurts credit utilization and age
2. Only paying minimums: High utilization hurts your score
3. Missing payments: One late payment can drop your score significantly
4. Opening new accounts: Too many inquiries hurt your score
5. Not checking credit report: Errors can hurt your score

Using Comeup.ai to Track Progress

Comeup.ai helps you track both debt payoff and credit score improvements:

• Monitor debt payoff progress
• Track credit utilization ratios
• See how debt payoff affects your credit score
• Get alerts for payment due dates
• Visualize your financial progress

The Bottom Line

Improving your credit score while paying off debt is absolutely possible. Focus on paying on time, reducing credit utilization, and keeping old accounts open. As you pay down debt, your credit utilization improves, which boosts your score. The key is consistency—make all payments on time and continue paying down balances.

Remember, credit score improvement takes time, but every on-time payment and every dollar paid toward debt moves you closer to both debt freedom and better credit.