 TITLE: How to Prioritize Debt and Rebuild Your Credit CONTENT: Research Your Options\n---------------------\nPaying down your debt can help you save money and improve your credit. Two ways to attack your debt are the debt avalanche and debt snowball payoff methods.\nWith the debt avalanche approach, you make minimum monthly payments on all your debts except the one with the highest interest rate; pay as much as you can toward that account until it's paid off. Then use the same strategy on the debt with the next-highest rate and so on until all your debts are paid off.\nThe debt snowball approach won't save you as much money as the debt avalanche method, but it will give you quicker wins, which may help you stay motivated to pay off your debts. With the debt snowball, you pay off the debt with the lowest balance first, regardless of the interest rate. Pay as much as you can to that account while making minimum payments on other debts, then once that's paid off, focus on putting the most money you can toward the debt with the next-lowest balance, and so on.\nBecause late payments can both cost you in fees and do serious damage to your credit, make sure that you make all payments on time going forward. Putting your bills on autopay and scheduling them to allow enough time for payment processing makes it far less likely you'll be late with payments, which can go a long way toward improving your credit scores.\nIf you're having trouble making payments due to high interest charges, lenders may be willing to make your payments more manageable. Try calling your lenders to ask if they would consider lowering your interest rate. If a card issuer is willing to reduce your interest rate by even just 0.5%, it could make paying off your balance much easier.\nWith regular, on-time payments, your credit score could start to improve after a few months. A credit score in the 700s, which could take anywhere from a few months to a few years to attain depending on your situation, usually results in better interest rates and terms from creditors. At this point, you might consider refinancing high interest debt to lower the interest rate and save money.\nIf you get paid every two weeks but all your bills are due at the beginning of the month, having enough money to make your payments on time can be challenging. In this case, consider asking lenders to change the due dates so you have a couple accounts due after your second paycheck of the month. That way you're more likely to have the cash flow you need to pay all your expenses on time.\nIf you have federal student loans and are struggling to pay them, you might be able to switch to an income-based repayment program. You can even try to defer these loans for a certain period of time. You may still accrue interest during this period, but deferment can provide some breathing room while you focus on your other debts, and could help you avoid hurting your credit. END