Paying off a debt does not lower your credit score. Paying off a credit card and immediately closing it does. Paying it mostly off and making small monthly payments for a few months and then closing it improves your credit score. The best way to improve your credit rating: Get a relatively low interest credit card from your bank. Keep between 10% and 25% of the credit limit on the card. Charge something every month. Pay more than the minimum every month. That's it. Doing this, my credit score went from mid-400s to 780 in 6 months.