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Carrying large amounts of high-interest debt cuts into聽your ability to save to meet other needs. On the flip side, keeping debt in check and ensuring that your credit score stays solid makes many things easier, including getting a job, a loan or even insurance.

Many American adults struggle with debt.聽聽reports that of households that carry debt, the average amount owed on credit cards tops $16,000, while the average mortgage debt stands at about $155,000-plus. At the same time,聽聽on retirement readiness have sounded the alarm that debt levels for older Americans are increasing, putting these people鈥檚 retirements at risk.

Don鈥檛 let debt get out of hand

Debt hurts your financial security in two ways. It鈥檚 obvious that it slows down your accumulation of wealth for retirement. But what may not be as easy to see is that by building up debt, you get used to an inflated lifestyle 鈥� and that makes it even harder to change your behavior when you commit to paying it off and living within your means.

Here are some steps to help you get your debt under control:

1. Aim to pay off debt using incoming cash flow, not savings.聽It may feel like a struggle, but if you pull money out of savings to pay off things like your credit card you run a high risk of simply running the credit card balances up again. This will put you even farther behind on your savings goals.
2. Make all minimum payments on time.聽Paying your bills on time is one of the most important things you can do to improve your credit. Late payments appear on your credit report and hurt your score more than anything else.
3. Pay down debts with the highest interest rate first.聽Make extra payments on the debt with the highest interest rate because that鈥檚 the debt that鈥檚 costing you the most money. Often, that鈥檚, especially if you took out聽your mortgage while rates were very low.
4. Evaluate paying off low-interest debt versus saving more.聽As you pay off your highest-interest debt, you will want to start evaluating the best place to put your money next. Think about it: Every聽percentage point you pay in interest toward your debt offsets each percentage point in returns you earn with your investments. For example, if your mortgage interest rate is only 5% but your investment portfolio earns an average of 8%, you may choose to prioritize maximizing your 401(k) contributions over prepaying your mortgage.
5. Save money by paying off聽your聽credit card each month.聽If you pay your credit card balance in full聽every month, you鈥檒l never pay interest. But if you owe even one penny on a credit card, then every time you use that credit card you鈥檒l be charged interest on that charge from the very first day of your purchase. If you must carry a balance on a credit card, use another credit card with a zero balance to make your regular purchases, and pay it off at the end of the month.

Improving your credit

Keeping your credit in good shape doesn鈥檛 take a lot of effort, but it does require continuous maintenance. Here are the best steps to take to keep your credit score high:

1. Check your credit report annually. You can request聽your credit report 鈥� that鈥檚 a record of all your credit activity 鈥� for free once a year to make sure it鈥檚 accurate. Visit聽. Since three primary credit-reporting agencies provide reports through the website, you can聽actually get a free update every four months by requesting one at a time. Look for debts or charges you don鈥檛 recognize or that show聽incorrect information. In addition to checking your report, periodically聽check your actual聽. Many credit card companies and some websites now offer credit score monitoring for free and will give you tips on how to improve it.
2. Pay bills on time.聽Late and missed payments show up on your credit report and can seriously harm your credit score. Automate your payments to ensure you never miss any.
3. Cut bad credit habits.聽If you have multiple credit cards, stop using most of them and rely on the one or two that have the best terms. You can consider聽that carry an annual fee, but keep in mind that the older a credit line is, the more it strengthens your credit score. Don鈥檛 open new cards, as each card you open will negatively affect your credit. Never max out the cards you聽use聽and always pay them off in full; to make sure you use and pay off your bill each month, put a recurring expense like your Netflix or Hulu subscription on your credit card.聽The amount you owe on revolving credit (credit cards) counts for 30% of your credit score. Use these cards sparingly to build your credit history. When you do use them, pay them off immediately.

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