Proven Ways to Boost Credit and Crush Debt Fast

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When it comes to your finances, there’s no escaping your credit score. That three-digit number pops up when you want to rent or buy a home, snag a new insurance plan, borrow money and more.

But for many Americans, the need to get out of debt trumps the need for a high credit score. Nearly 8 in 10 borrowers (79%) would accept a credit score drop if it meant becoming debt-free sooner, according to a recent survey of 1,800 people with at least $10,000 in unsecured debt from Freedom Debt Relief and Money.com.

When someone’s deep in debt, “the score stops feeling like an asset and starts feeling like a leash, and cutting it to get free is a rational thing to want,” says Matt Chancey, a financial planner and founder of Tax Alpha Companies.

A strong credit score is still a high priority

Not everyone is as willing to take a credit score hit, and that was especially true among older survey respondents. Nearly 40% of baby boomers say they won’t accept a score drop, versus 9% of millennials. Younger respondents were far more likely to be open to a larger drop, too: About a third of all survey respondents are willing to give up more than 100 points to help them become debt-free faster, but that share jumps to about half of Gen Z and millennials..

It’s not that people don’t understand the importance of a credit score. More than half (55%) of respondents acknowledge that debt reduction strategies that temporarily lower your credit score — such as closing an active account, which can shorten your credit history and lower your credit mix — come with risk. In fact, 45% say improving their credit history and score is at least part of their motivation for wanting to pay off their debt.

There’s a good reason people want to maintain a strong score. The interest rate you’re charged when borrowing money is highly dependent on your credit score, and borrowers with high credit scores tend to receive the lowest rates, says Kevin Arquette, wealth manager and managing partner at WealthPoint Financial Planning. “Maintaining a strong credit score gives you more flexibility.”

But sometimes, it can make sense to let it fall in exchange for getting out of debt.

When you should (and shouldn’t) allow your score to drop

There’s a range of ways that debt-reduction strategies can impact your credit report. Closing an active account can result in a small, temporary dip, while the delinquency that typically precedes debt settlement and bankruptcy result in more significant drops.

As is the case with most personal finance-related questions, there’s no clear rule about when hurting your credit score in exchange for getting out of debt is the right move. But understanding whether you’re facing a short-term drop or a longer-term decline, and what moves are on the horizon that may require a credit check, is key to making the right choice.

“Generally speaking, it’s okay to take a temporary reduction in your credit score to pay off debt,” Arquette says. This could happen if you open a new line of credit, like a consolidation loan. By doing so, you free up cash flow for saving and investing while also reducing the amount you pay in interest. Assuming you continue making your payments on time, your credit score should recover relatively quickly, he adds.

A larger drop with a longer recovery time may be acceptable when the debt is unmanageable, you won’t borrow in the near future and the honest alternative is worse (think years of payments that never touch the principal or bankruptcy), Chancey says. “In that corner, a bruised credit report is a price you pay on purpose to escape something heavier. It’s a real tool, and sometimes it’s the right one.”

If you can actually chip away at your debt without going delinquent — or if you’re looking to secure a mortgage, car or apartment, or refinance in the next year or two — it likely makes sense to protect your score instead.

“Torching your credit right before someone pulls it can cost you far more than the debt ever did,” Chancey says.