Should You Pay Off Debt or Fix Your Credit?

It can be extremely tough to figure out what to focus on first when you are in debt and you also need to work on your credit. You may not be able to access new credit if you have bad credit and a large amount of debt.

To improve your credit and pay off your debt, you may have to spend a bit of extra money each month, but will it be worth it? OF COURSE!

As I always say, there is nothing a credit repair business can do that you cannot do for yourself. But it is just like doing your taxes. Can you do your own taxes? I’m sure you can, but you may want to hire a professional with years of experience to ensure it is done effectively and save you time.

Again, you can repair your own credit by using the DIY Credit Repair Kit below

DIY Credit Repair Kit

Hire a reputable company like BYB Credit Consultants below

Hire Us

Or any trusted and legal Credit Repair Company of your choice. Either way, you’ll have to put some cash towards rebuilding your name and credit scores.

The same thing goes when paying off your debt. As long as you continue to make the minimum payments, you won’t see much progress. Most of your monthly payment will go towards interest and your balances will barely decrease. To obtain faster results and see significant progress, you’ll have to put some extra money towards paying your debt on top of the minimum payment.

You Can Do Both - And You Should

Here's the great news! Paying off your debt can help improve your credit score, especially since your credit score is largely based on how well you pay your debts. For example, a large part of your credit score (30% to be exact) is based on the amount of debt you're carrying, particularly when it comes to credit card balances. As you pay down your debt balances, your credit score will probably increase too, depending on the other information on your credit report. That’s because your credit score responds favorably to low credit card balances.

Part of paying off debt includes addressing charge-offs and collections. These are of the worst types of negative items and can hurt your credit score significantly, especially when they are unpaid and on your credit report. You can choose a variety of strategies for dealing with these - from paying them off to negotiating a settlement or disputing them and getting them removed from your credit report. Taking care of these serious past due balances knocks out some major debt and helps your credit score too. Don't be discouraged. Create a realistic plan to get out of debt! CREATE A BUDGET AND STICK TO IT!

Personal Finance Planner

You will achieve your financial goals! You just have to take the first step, remain consistent, and don't ever give up!