Will paying off my debt increase my credit score?
Daniel Santos
Updated on February 17, 2026
Your credit utilization — or amounts owed — will see a positive bump as you pay off debts. Paying off a credit card or line of credit can significantly improve your credit utilization and, in turn, significantly raise your credit score.
How can I get out of debt without damaging my credit?
What Can I Do to Avoid Falling into Debt?
- Keep balances low to avoid additional interest.
- Pay your bills on time.
- Manage credit cards responsibly. This maintains a history of your credit report.
- Avoid moving around debt. Instead, try to pay it off.
- Don’t open several new credit cards to increase your available credit.
How does a debt consolidation program work for your credit?
But overall, a debt consolidation loan could improve your credit scores as your credit utilization rate will decrease if you consolidate credit card debt with an installment loan. Debt settlement: The debt settlement route will often hurt your credit, as you’re advised to stop paying your bills and let your accounts go past due.
Is it better to consolidate credit card payments?
You combine all your credit card debt into one monthly payment at the lowest interest rate possible. You can get out of debt faster and save money on interest charges, and it may lower your monthly payments, too. However, credit card debt consolidation is not a silver bullet.
What happens if you get a debt consolidation loan late?
You’re 30 days (or more) late on making your payments on the debt consolidation loan. (Payment history is one of the biggest factors of your credit score) You apply for loans for which you cannot qualify.
How long does debt consolidation stay on your credit report?
Collection records stay on your credit report for seven years and until that time passes, your credit will suffer immensely. If you are suddenly facing financial difficulties and worried you’ll miss a consolidated debt payment, call your credit card or loan issuer before your payment becomes late and your credit score takes a hit.
