On-time Payments

• Paying off credit cards by making on-time payments can significantly improve your credit score because it shows that you are a responsible consumer. When you pay on time consistently, it shows that you have enough money to afford to pay your bills and that you can be relied upon to do so. Establishing and maintaining a good payment history with your credit cards will improve your score.
  
  

Balance Reduction

• According to the FINRA Investor Education Foundation, having high credit card balances can bring your credit score down. If you pay off the balances early by sending more than the minimum amount due each month, you can offset this negative effect. Pay as much as possible because if you just pay the minimum due on a high balance, most of your payment goes toward the interest. By adding more, you bring down your high balances by reducing the principal amount. This improves your credit score.
  
  

Type of Debt

• The FINRA Investor Education Foundation says that paying off your credit cards has a more positive impact on your credit score than paying off other debt types, such as car loans. It means that channeling more money into paying off your credit cards while paying the minimum amount on less important loan types will improve your credit score more rapidly.