‘Shark Tank’ Hack: How to Pay Off Debt and Raise Credit Score

Money is tight for many Americans right now, as skyrocketing inflation is causing families to spend over $700 more per month than they were two years ago. And given that economic woes will exacerbate as we head into the holiday season, Kevin O’Leary (a.k.a. “Mr. Wonderful”) from Shark Tank stopped by Good Morning America on Friday to impart some financial advice.

O’Leary says the key to account for the new interest rates is to reduce spending by 20 percent, though that’s certainly easier said than done when the bulk of your income goes to food and rent (or mortgage).

Of course eliminating debt is also a huge issue for many people. As such, O’Leary took a viewer’s question about the best way to build credit score while paying off student loans and credit card debt. Thankfully he was able to offer a fairly easy, straightforward solution.

“Get a credit card,” he said. “One credit card, OK? Spend about $50 a month on it. You don’t need to spend any more than that—then pay it off. Make sure you pay if off on time, every month, month after month.”

Here’s why that’s a smart financial move.

“The algorithms that look at you increase your credit score regardless of how much you’re paying off,” he continued. “So you don’t have to put thousands on it. The fact that you pay it off gets you a higher score immediately. This is the trick you have to do. It’s a hack. Right out of college, get a card. Don’t abuse it. Pay it off every month. Any small amount works.” 

Halloween is big business for Mr. Wonderful! ??@SharkTankABC star @kevinolearytv talks about tonight’s Halloween episode and answers your questions about money. pic.twitter.com/20aCxXiKzk

— Good Morning America (@GMA) October 27, 2023

And while it still might take some time to get out of debt, in the meantime, putting a small amount of money on one card and paying it off every month is attainable for earners at most income levels. And then, with any luck, by the time you get out of debt your credit score will have bounced back.