Manage credit and debt


4 steps to manage credit and debt

Healthy credit and manageable debt may improve your finances

Healthy credit and manageable debt can give you the power to do more

Don’t let debt get in the way of where you want to go in life.

Excessive debt can deplete your savings, erode your credit score, and limit your ability to invest in the future.

By successfully paying down (and eventually paying off) your debts, you can have more cash flow for saving, investing, and making purchases without using credit.

These four steps can help you manage your debt and credit.

Step 1: Assess your current financial situation and know your credit score

Your credit score is important because it helps lenders to understand how likely you are to repay a loan and what terms they’ll offer for future loans.

Paying down debt is one of the best things you can do to strengthen your financial picture and improve your credit score.

The first step toward reducing your debt is to clearly understand your current financial situation.

To get started, make a list of each of your outstanding debts. This might include credit cards, loans, and all other outstanding bills.

This comprehensive list should include the total amount owed, current interest rates, and minimum monthly payments.

Next, enroll in Credit Close-Up® to get complimentary access to your FICO® Credit Score, also including:

If you don’t have a credit score, you can start building good credit history by opening a credit account — such as a credit card, store card, or loan — and consistently making on-time payments.

If you can’t qualify for a credit card account on your own, consider becoming an authorized user on someone else’s credit card (like a spouse or relative) or applying with a co-signer or co-applicant.

View Credit Close-Up

Step 2: Make a debt reduction plan

A realistic budget may help you to spend less than you earn, pay all your bills on time, and find extra money that you can apply to debt reduction and savings.

Not all debts are created equal. Prioritizing your debts that you want to pay off first can be a smart move. To get started, compare the avalanche and snowball debt repayment strategies.

Depending on what works best, you can pay off your high interest rate debt first, or you can pay your lowest balance debts first.

If you have multiple debts with high interest rates, consolidating your debt into a single loan may be an option worth considering.

Once you find a debt reduction plan that works, stick with it, and celebrate as your debt shrinks over time.

Step 3: Commit to good spending and repayment habits

You can build your credit by spending carefully, keeping debt manageable, and adopting excellent repayment habits including:

If you do have a credit history and want to improve your credit score, keep your credit utilization low.

Credit utilization is the percentage of your available credit that you're currently using.

Keeping your credit utilization under 30% of your available credit limit demonstrates your ability to manage credit responsibly.

Even better, if you can pay off your credit card balances in full each month, you may positively impact your credit score.

Step 4: If you’re having difficulty paying your bills, ask for help

Your creditors don’t want to see you fall behind.

If you ever have trouble making a payment, contact your creditors to understand your options. You may be able to work out a repayment plan that fits your situation and needs. 

Visit Wells Fargo AssistSM if you experience difficultly making payments on your Wells Fargo account. We may have options that can help.

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You’re on your way to better managing credit and debt. Up next:

Snowball vs. avalanche methods of paying down debt

Paying off your debt can seem overwhelming, but these two strategies can help.

Learn more >

Know what lenders look for

Improve your chances of getting a loan by learning the 5 C’s of credit.

Learn more >

How to calculate your debt-to-income ratio (DTI)

Calculating your DTI may help you determine how comfortable you are with your current debt and help inform upcoming financial decisions.

Learn more >


We’re here for you

If you’re looking for options, a local banker could help.

You must be the primary account holder of an eligible Wells Fargo consumer account with a FICO® Score available, and enrolled in Wells Fargo Online®. Eligible Wells Fargo consumer accounts include deposit, loan, and credit accounts, but other consumer accounts may also be eligible. Contact Wells Fargo for details. Availability may be affected by your mobile carrier's coverage area. Your mobile carrier’s message and data rates may apply.

Please note that the score provided under this service is for educational purposes and may not be the score used by Wells Fargo to make credit decisions. Wells Fargo looks at many factors to determine your credit options; therefore, a specific FICO® Score or Wells Fargo credit rating does not guarantee a specific loan rate, approval of a loan, or an upgrade on a credit card.

Certain information provided by Fair Isaac Corporation, San Rafael, California.

Sign-up may be required. Availability may be affected by your mobile carrier's coverage area. Your mobile carrier's message and data rates may apply.

This calculator is for educational purposes only and is not a denial or approval of credit.

Before you apply, we encourage you to carefully consider whether consolidating your existing debt is the right choice for you. Consolidating multiple debts means you will have a single payment monthly, but it may not reduce or pay your debt off sooner. The payment reduction may come from a lower interest rate, a longer loan term, or a combination of both. By extending the loan term, you may pay more in interest over the life of the loan. By understanding how consolidating your debt benefits you, you will be in a better position to decide if it is the right option for you.

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