Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!)

Dear Pay Dirt,

I am 27 and looking to pay off as much debt as I can before looking to purchase a home. But there are some obstacles in the way. My parents never gave me sound financial advice when I was younger. And I have been financially independent since 18, which has lead to debt accumulation I could have avoided.

I now have an amazing job where I make $1,600 biweekly after taxes, and I can comfortably pay the minimum amounts on my debt because of low living expenses. My credit score is around 660, which I have been working to improve. I have heard about the debt avalanche and debt snowball methods, but I believe my situation is little unique! I have $1,500 on a credit card with a 19.99 percent interest rate, $12,500 on a credit card with a percent interest rate (lucky to have a low interest rate but it made me irresponsible with spending on the card), and a personal loan balance of $9,000 (principal amount plus the interest) with an excruciating interest rate of 38 percent that I regretfully had to take in an emergency situation. I also have $5,000 in student loan debt with a very low interest rate of 5 percent.

I definitely want to consolidate the personal loan to my own financial institution with a much lower rate, however I don’t want to mess up my credit score with an inquiry in case I am declined because of my debt ratio. I first applied for a consolidation loan three years ago when my income was half of what I make now. A co-signer was suggested, as well as consolidating all of my debt, but at the time, it didn’t make sense when some interest rates would be lower then the loan rate quoted around 9 percent. My question now is how can I be in the best position to get approved for the consolidation loan and possibly pay down some other debt before applying? I would like to keep both credit cards, and I know that I can be responsible with them while paying off the balances, I just need this personal loan consolidated to a lower interest rate. Thank you so much for the advice!

—Millennial Money Problems

Dear Millennial Money,

Debt consolidation can be really useful, especially with an interest rate that high, but use caution. Consolidation can sometimes be dangerous because it stretches out the term of your debt, requires a lot of upfront fees, or comes with hefty penalties. In some cases, you might pay more over time than you would just paying back your lenders. It sounds like you found a decent option with a much lower rate, just make sure to read the fine print, and check out some of the pros and cons of debt consolidation here.

Now onto your question, which is about how to maintain the best possible credit score before you apply. The answer might seem like a counterintuitive one, but paying off as much of that super high-interest rate loan as possible would be your best bet here. It will lower your total “amounts owed” and make you look less risky to a new lender. Plus, the new lender isn’t just looking at your score, they’re looking at your full report. They might be a bit more likely to approve a $7,000 loan consolidation than a $9,000 one. Lenders care a lot about your debt‑to‑income ratio, too, so paying down that high‑interest loan lowers your overall debt load, which can improve your chances of getting approved.

If you are declined, keep in mind that any hit you take to your credit score just for trying to open up a new account is likely to be short-lived. Meaning that there’s a good chance next time you need to use your credit score, it will have recovered. And the best way to supercharge that recovery? Pay down your debt. It’s not the fun answer, but it’s the one that will set you up for the most success.

Please keep questions short (<150 words), and don‘t submit the same question to multiple columns. We are unable to edit or remove questions after publication. Use pseudonyms to maintain anonymity. Your submission may be used in other Slate advice columns and may be edited for publication.

Dear Pay Dirt,

I will be inheriting approximately $140,000 in the near future from the sale of my late grandmother’s apartment. I have no idea what to do with this money. I have an existing 401(k) with about $150,000 in it that I have been dutifully contributing to since I was in my early twenties. I am 36 if that matters here. I live with my longterm partner, and he owns our house. I have two kids under 10 and two older step kids in their teens. I just literally have no idea what to do with this money. Re-do my kitchen? Go on some once-in-a-lifetime vacation? Put it all in some kind of managed account where I could grow it into an early retirement? Please help, I am completely lost. I always knew I would inherit some life-changing (for me) amount of money, because my grandmother was well off. But now that the time is here, I am feeling nothing but a complete loss of what I am supposed to do with this money.

—What Am I Supposed to Do?

Dear What Am I Supposed to Do,

I know you feel a little lost right now, but this is a great problem to have—if you allocate these funds the right way, you can have it all: financial stability, a little nest egg boost for retirement, and even some extra for a splurge.

For starters, do you have an emergency fund? If not, that should be your priority. A traditional rule of thumb for emergency funds is to have three-to-six months of living expenses saved in case of an emergency: That might be a job loss, your car breaks down, you need some massive home repairs, etc. Some argue that three-to-six months is overkill, but you can decide on an amount that would feel comfortable for you. If any emergency popped up, what amount would make you feel safe and keep stress at a minimum? Stick with that amount. You can also use an online calculator to help you out here.

If you have any high-interest debt, that’s the next place you want to focus on (some would argue that should even come before saving for an emergency). High interest rates keep people trapped in cycles of debt that can be hard to break out of, so if that’s you, now is your chance.

You’re right to think about retirement goals. And there are plenty of online calculators to help you figure out how much you should have saved, depending on your age. Again, these numbers are more like milestones than strict figures, so use them as a jumping off point for coming up with a retirement savings goal that feels right for you. Choose a percentage of your inheritance (left over after emergencies and debt), to put away for your retirement. You can either do the math and increase your 401(k) at work with the appropriate amount or, better yet, open an individual retirement account (IRA)

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You can’t directly roll a cash inheritance into a 401(k) or IRA—rollovers have to come from other retirement accounts, and new contributions have to be made from earned income. But money is fungible: You can use the inheritance to cover living expenses and increase the amount of your paycheck that goes into retirement accounts, as long as you stay within contribution and income limits. If all of this sounds a bit like I’m speaking another language, it might help to work with a fee-only Certified Financial Planner to walk you through this part of it—yes, they’ll charge you a few hundred bucks, but the extra guidance will be well worth it when you’re dealing with something like this. Plus, they can help you navigate the tax laws of your state. Federally, there’s no tax on inheritance, but state laws vary. You might also choose to balance your retirement savings with saving for college via a 529 plan, and again, this is where a planner will come in handy.

Finally, the fun stuff. If a dream vacation sounds nice to you, now is the time to go for it. One rule of thumb for inheritance splurging is to spend “Five to 10 percent of a smaller inheritance, or $10,000 if you get a large amount, on something fun.” Even with four kids and two adults, that amount should take you somewhere nice. If you had a good relationship with your grandmother, you might find it uplifting to think about a way to honor her with the funds, too. Is there someplace she always wanted to visit but didn’t get the chance? Is there a cause that meant a lot to her? Of course, this is totally up to you, but a lot of people find this helpful as part of the grieving process.

—Kristin

More Money Advice From Slate

We need help figuring out how to equitably manage inheritances in a blended family. My two youngest children (former stepchildren, now adopted by me!) recently came into a very significant amount of money in the form of an inheritance from their maternal grandparents. Unfortunately, it’s not in a trust.

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