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Credit scores always seem to be rather esoteric things that have a surprising effect on our lives. Credit scores affect what credit cards you can open if you can buy a house, the rate on a car loan, your car insurance rate, and even some jobs. Exactly how credit scores are calculated can seem a bit mysterious and how that works is the topic of another post. From time to time, the major credit bureaus who measure the creditworthiness of consumers give hints, tips, and tricks as to how to better your credit score according to their secret metrics.

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Improving your credit score

The best thing about paying your credit card bill early is that you can dramatically improve your credit score. A big part of your credit score is how much credit you are using relative to the amount of credit available to you. Reducing that amount will have a direct effect on your credit score. The more credit available, that is the less you are using, then the higher your credit score because it shows that you are a responsible borrower. This is valuable information to the credit bureaus. It shows that when you borrow the money you pay it back and you don’t max out your credit cards all the time and keep them maxed out while only paying the minimum payments per month.

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Making extra or early payments

The key to making an extra or early payment is to pay toward your credit card balance in the middle of the billing cycle. If your card company always bills you on the 28th, then the best time to make an extra payment would be on the 15th. For budgetary purposes, set aside some extra money in your middle of the month paycheck to make that extra payment. Making this a regular habit is a great way to pay down your credit card debt.

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Know when to make a payment 

If you wait too long to make a payment then you’ll just be making your minimum plus extra and won’t save any interest on the following month. The key to making this debt reduction strategy work is to pay well before your next payment comes due. Making payments above the minimum is a great strategy if you carry a balance, but making that extra payment adds the extra benefit of reducing the interest charged the following month, saving you money on your carry-over balance long-term.

Paying off credit debt is no easy task but with this little insider trick, paying down that credit card should be easier than ever before.