It’s no secret that excessive debt often contributes to lower credit scores. If you are working to improve your credit scores you might have several debts that are in repayment, whether they be credit cards or personal loans. But how can you know which debts to pay off first, or if you should pay at all?

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Here are a few tips to help simplify the process so that your credit goes back up as quickly as possible.

Check your credit report and credit scores

People who know they have poor credit may only know because they’ve recently been turned down for new credit. First, check with the lender to find out the exact reason why you were denied the financing.

You might know whether you have too much debt or not, but it’s good to make sure there aren’t any other issues on your credit report that lenders see as a problem. At the same time, get your credit report sooner rather than later.

Being turned down for credit entitles you to a free copy of your credit report, even if you’ve already received your credit report in the past year. By getting the most recent version of your credit report and scores, you’ll know exactly where you stand. Start off by disputing any inaccuracies that you see – inaccurate items on your credit report can significantly damage your scores.

See the full financial picture

Before you can pick a strategy for paying down your debt, you need to get a full understanding of what you owe. Start by itemizing your debts, which will help you to focus on paying them down more efficiently. Also, note both the minimum payment for each debt and your monthly interest rate.

Don’t try to guess and pull numbers out of the air. Look up your user agreement or call the customer service number to find out exactly what you owe and how much interest you’re being charged. You’ll need the exact numbers for each piece of information when considering your various debt repayment strategies.

Once you’ve compiled your list, it’s time to analyze your current budget and spending habits. If you’re still regularly charging items on a credit card, it’s time to stop, especially if your purchases are beyond basic necessities. Take a look at your monthly income and realize that is all the money you have to work with for both spending and paying down your debt.

Next list out all of your absolute necessities, like housing, utilities, phone bill, gas, and groceries. Also, include your minimum balance payments in that monthly tally. It’s important to remember to maintain those minimum payments, otherwise, you run the risk of defaulting on the debt and hurting your credit even more.

Whatever money you have leftover after your essential expenses can be allocated to paying down your debt. The more aggressive you want to be, the more you can shave off of your budget. You can spend less on groceries, reduce your driving to conserve gas, and get a cheaper cell phone plan.

If you’re still coming up short, it might be time to take more drastic action. You could get a part-time job, trade in your car for a cheaper model, or sell some of your things on Craigslist. Once you’ve figured out how much money you can contribute to paying down your debt, it’s time to decide the best way to go about it.

Pay off the smallest debt first

By getting rid of debts in a targeted fashion, you can improve your credit scores more quickly as you eliminate your debt obligations one at a time. One option is to pick the smallest debt on your list and put all of your extra money into paying it down aggressively. Just remember to always pay your minimum balances on your other obligations first.

Once you’ve got a single credit card or small loan completely paid off, you’ll feel motivated to keep moving onto the next balance. This approach also reduces the number of monthly payments you need to keep track of.

It won’t save you extra money in interest payments along the way, but it is convenient, especially if you have a hard time remembering to pay your bills each month. Plus, you’ll create a snowball effect allowing you to put more and more money towards larger debts as you pay down the smaller ones.

This is a great option if you want to psychologically set yourself up for success as you continue to pay off multiple debts. You’ll quickly prove to yourself that you are indeed capable of becoming debt-free. From there, you’ll want to keep up the momentum because you’ve already seen that it’s possible.

Pay off the highest interest balance first

Not everyone needs a quick win to stay motivated. For some, knowing that they’re saving extra money on interest payments is all the motivation they need. If this sounds like you, look at your list from a financial standpoint and find the loan or credit card with the most expensive interest rate.

The longer you wait to pay off that debt, the more interest you’ll accumulate and pay over time. No matter how large or small your balance is, the highest interest debt is the most expensive.

Once you’ve knocked out the first one, move on to the next highest interest rate and continue on in order. Just like the strategy to pay down the smallest debts first, you should put the same amount from the first debt you paid off towards the second debt, and so on. If you’ve been a loyal customer with consistent timely payments, you might also consider negotiating your highest interest rates.

Call the credit card company or lender and explain that you are focused on paying down the debt as quickly as possible and would like a lower rate since you’ve been doing such a good job with your payments. There’s no harm in asking, and people are often surprised at the positive response they receive.

Don’t forget to reward yourself along the way

Getting out of debt and improving credit scores is hard work. Whenever you meet one of your goals, set aside a reasonable reward to celebrate your hard work.

Whether it’s a day trip, a special night out, or some other treat, make sure that it fits with your current budget and savings goals. This is not an excuse to splurge, it’s simply a moment to breathe and appreciate yourself and the sacrifices you’ve made.

It’s also great to keep a supportive friend or relative updated on your progress. They’ll be there to help keep you on track when you’re tempted to spend on something beyond your budget, and they’ll also be there to give you a high-five when you reach your latest milestone. Community is important in all of life’s endeavors, whether it’s someone in real life or even an online support forum.

Remember that not all debt is bad

Some debts are actually seen as good debt by lenders. In general, if you have borrowed money to purchase something that will increase in value, this debt is seen as positive by lenders.

Student loans, traditional mortgages, and money borrowed to grow your business all fall into this category. That doesn’t mean that you shouldn’t repay these debts – on the contrary, paying off good debt can only increase your net worth in the future.

Just keep in mind that you should be strategic about which debt you decide to pay off first. Low-interest loans like mortgages and student loans probably aren’t accruing nearly as much interest as credit cards, car loans, and personal loans. And since they are considered installment loans rather than revolving debt like credit, they are weighted more favorably when your credit score is calculated.

Strategically paying down debt and paying all of your bills on time are two of the most powerful techniques for raising credit scores. In fact, together these two categories represent 65% of your credit score!

It may take time, but with diligence and consistency, just these two simple actions can drastically increase your score and get you back on the path to financial success, enjoying loan approvals and the lowest interest rates.

If you ever feel overwhelmed or you’re having difficulties with tackling your debt and getting your credit on track, talk to a reputable credit repair agency. Working with a professional helps you to get a complete analysis on your credit report and what actions will work best for your unique situation.

Plus, it can save you a lot of time in the event you need to dispute items and work with creditors and credit bureaus. Once you know all of your options to clean up your credit report, you can then start to raise your credit scores one step at a time.