[Jennifer Medeiros]

After receiving my credit score and looking over my open accounts, I am left with questions about which debt to pay down first. I have revolving debt in the form of credit cards. I also have installment debt in the form of a personal loan. The interest rates are similar. Which debt should I pay off first? Which looks better and can improve my credit score the fastest?

[Sum180 Lead Coach]

Interest rates being similar and assuming that you are making the required and/or minimum payments on all debt every month, you will generally want to work on paying off the revolving debt first. First, it is important to use no more than 25% of your revolving credit maximum in any given month to avoid hurting your credit score, so getting and keeping the revolving debt low is important. There is no similar restriction on installment debt. Second, the interest rate on your revolving debt could go up based on your credit score, whereas the interest rate on installment debt is fixed.