December 19th, 2012

How a Little Extra Income Can Help Your Credit Score

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Income and Credit Score

**Today’s guest post is contributed by Benjamin.**

Do you want a better credit score? Of course you do. We all do, right? At the beginning of 2012, I had several thousand dollars of credit card debt and I wanted to improve my own credit score.

The first thing I did was research how I could change my score. If you’ve been reading the Credit Karma blog then you already know some great ways to improve your credit health, but for those who have debt you might feel stuck because of your debt weighing down your score.

So how can you improve your credit health if you are dealing with debt? One way that helped in my case was to earn some extra income:

Why Extra Income Can Improve your Credit Health

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.

Easy Ways to Make More Income

Believe it or not, it’s easier than you think to earn a little extra income. One of the first things to consider is how long it’s been since you got a raise. If it’s been awhile, you should seek out an opportunity to negotiate a salary increase. It’s amazing how much you can change your financial picture simply by taking some simple steps to get that well-deserved raise.

But beyond your regular salary, there are a lot of great ways to earn extra money on the side. Here are a few options that can work for almost anyone:

    • If you are creative, allocate some of your free time to creating jewelry/decorations that you can sell on sites like People are willing to pay quite a bit for high quality hand-made crafts.
    • On the other hand, if you enjoy writing, you can get paid to write articles in your spare time, via sites like
    • Even if you don’t want to create something, you can look for odd jobs on sites like (ranging from transcribing to filing) that can give you some extra income.
    • If you have things lying around your house or in storage that you don’t need anymore, you can make money on eBay by selling them.
    • And if you have a spare bedroom in your house, consider using or renting out the room long-term in order to generate some additional money each month.
    • Another great option is to do some tutoring for local students who want to improve in a specific subject. Students at all levels need tutoring, and it’s a great way to make some extra money.

These are not all easy to do. Some of them require a lot of work and planning, but there is a good chance that one of the things above will be a good fit for you – and if it’s not, then maybe you’ll be inspired to come up with a different idea that you can share in the comments. No matter how you do it, adding some extra income can definitely help your credit score.

Make Sure You Stick with Your Plan

The most important thing for those who decide to earn extra income to improve their credit health is to remember why they’re doing it. The last thing you want to do is earn extra income and then spend it all on more retail goods or other things that don’t help you reach your goal of a higher credit score.

You should write down your goal and place it somewhere in your house where it will serve as motivation – not only to earn that extra income but also to pay off your debt with it and get that higher credit score you want. Good luck!

Benjamin Feldman is a writer and personal finance expert at ReadyForZero, a site dedicated to helping Americans manage and pay off their debt – for free.

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Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. You are exactly right! I didn’t know how to improve my credit rating. I went to a website called and enrolled in their credit management program. They’d indicated that if I were to pay $250 on my Visa, that my score would increase by 15 pts. They’d also suggested that since my credit wasn’t that bad, that I get another credit card and not use it, so I would decrease my utilization. It worked. Great advice! Thanks.

    Alex Routman at 4:16 pm on December 23, 2012
  2. I have additional income now because I receive
    Social Security. I am over 66 years of age.
    How do I get the credit reporting companies
    To recognize that income?
    It will probably make a difference in my credit
    The additional income is $1957.00
    William E. Harper

    Bill Harper at 9:41 am on February 6, 2013
  3. Jenna

    Hi Bill, your income actually doesn’t directly affect your credit score. You can read more here:

    Jenna at 12:24 pm on February 6, 2013

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