One of the most powerful ways to improve your credit health is to reduce your credit utilization, which refers to the percent of your available credit that you are using. For example, if you have two credit cards with a credit limit of $5,000 on each one (and no other credit lines), then your total available credit is $10,000. And if you have $3,000 of debt on each of those cards, then your credit utilization is 60 perecent (6,000 out of 10,000).
When you start paying off that $6,000 in debt, your credit utilization will be reduced, which will make your credit score go up. And that’s where the extra money comes in. You can supplement your regular debt payments with money from additional income to get the debt paid off and improve your credit utilization.