(BPT) - Debt: Americans’ least favorite four-letter word. But for many, it looms over their everyday lives. According to a recent report from The Pew Charitable Trusts, nearly 80% of Americans are saddled with some type of debt, leaving many of them feeling trapped and hopeless. Debt can negatively impact your credit score and a low credit score can harm your ability to access credit or to obtain the most favorable pricing and terms. However, breaking those shackles is still possible with the right strategy and guidance. Part of that strategy comes down to addressing the proper debts first.

Not all debts are created equal. Some people are overwhelmed with credit card debt. Others face medical emergencies and don’t have the insurance to cover an expensive hospital bill. Others have a public or private student loan they’re trying to pay off.

All of these debts can impact your credit in one way or another. However, not all of them have the same effect on your score. When it comes to paying down debt, it may be best to pay down the following types of debt first:

  • High-interest credit card debt: Many credit cards have a reputation for sky-high interest rates. For some cards, that is because the credit card companies are offering variable percentage rates. Market conditions and the Federal Reserve will have an impact on cards with variable interest rates.
  • Personal loans: Personal loans tend to have high-interest rates because, like credit cards, they are considered a form of unsecured debt, which means a loan that is not backed up by collateral like a car loan would be. According to Experian, one of the three national credit reporting companies, annual interest rates on personal loans generally range from 3% to 11%, depending on the circumstances. But on the higher end of the spectrum, the interest rate on a personal loan can top 28%.
  • Other high-interest debt: High-interest debt isn’t only reserved for credit cards and personal loans. Mortgages, car loans and student loans can also be high-interest debts, depending on the circumstances. For instance, if you have to take out a loan on a used car, the interest rate on that loan may be higher because lenders typically see used vehicles as a riskier investment.

Tackle your debt with these repayment strategies

There are various methods to pay down your outstanding debt. Depending on your circumstances, a debt repayment strategy can seem daunting at first. But with the right tools and plan, you can eliminate or significantly reduce your debt and break the financial chains holding you back. Here are a few common strategies that may help:

Debt consolidation

Your debt may be spread out across multiple loans, like student loans. When your debt is structured this way, it can make it harder to pay it down faster. However, when you consolidate these debts into one consolidation loan, that could reduce your interest rate and make it easier to track your payment progress. Be careful though, because after you use a debt consolidation loan to pay off credit card debt, for example, it may be tempting to use those credit cards again, which will actually increase your total debt load.

Debt snowball

If you have an overwhelming amount of debt, trying to pay everything off at once can create a lot of stress. But taking small steps first can help you reduce your debt to reasonable levels relative to your take-home pay and boost your confidence along the way. With the debt snowball method, you focus on paying down your smallest debts first while only making minimum payments on the rest. Then, as you eliminate each debt, you fight your way to the biggest one at the end.

Debt avalanche

The debt avalanche is the reverse of the debt snowball. This method suggests you tackle your debt with the highest interest rate first while making minimum payments on the rest. Then, as you get rid of those bigger debts, you can tackle the others while saving money on interest payments.

Digging yourself out of the hole is still possible

No matter how much debt you’re in, there is always light at the end of the tunnel. And no matter how you decide to tackle your debt, VantageScore can provide you with the tools and resources to get an accurate look at your credit. That way, you can better track your progress on your journey toward financial freedom.