Simple Steps to Achieve a Better Credit Report Score

Americans are dealing with the credit crunch by keeping cash on hand. In the process, however, the average consumer is paying 2.6 bills late every month, according to the Western Union Payment Services Money Mindset Index.

Unfortunately, late fees and additional unnecessary charges can stack up quickly, depleting your cash flow and harming your credit report score. Here’s how it works:

The longer you maintain a track record of paying your bills on time, the better your credit report score, according to the Fair Isaac Corporation, which created the FICO score, more commonly known as a credit report score. Your bill payment history accounts for 35 percent of your credit report score, which is used to determine your eligibility for mortgages, auto loans, credit cards and other financing.

However, late fees can lower your credit report score — and there’s no quick fix. When you apply for a loan, a low score may hinder your efforts to secure funds.

“Managing your finances can feel like a juggling act that won’t end,” says David Shapiro, senior vice president of Western Union. “Flexible payment plans can help consumers keep their cash flow strong by timing the paying of bills to when they get their paychecks. This allows you to avoid late charges and risking credit standing. Over time, consumers can build a strong credit history, allowing them to finance a car or a home when they are ready.”

In tough economic times, Shapiro and other experts say, lenders will scrutinize your credit report score even more. Many credit offerings and debt consolidation loans may seem advantageous, but can actually lead to debt disaster. Here are simple tips for avoiding unnecessary fees and maintaining a good credit score:

* Check your credit report. You can get a free report at annualcreditreport.com or by calling (877) 322-8228. If you see a mistake, take necessary steps to get the mistake corrected as soon as possible.

* You can go online to sites such as money.com or kiplinger.com and receive free advice about how to contact the credit reporting bureaus when there are mistakes on your credit report. If you tend to avoid confrontational situations then you will accomplish much more by hiring a professional like Sky Blue Credit Repair.

* Research flexible payment plans that allow you to make smaller, more frequent affordable payments, such as paying a bill twice a month, but at smaller increments that suit your monthly budget.

* Pay off credit card debt. Maintaining low balances can show your ability to manage bills and can increase your credit score over time. Once you pay it off, try to only carry a balance that you can pay off in a month. Paying off your balance each month in full can help your credit score. Canceling an old credit card can hurt your credit score, however. If you’re serious about improving your credit report score then a tool like the Suze Orman FICO Kit is an indispensable helper.

* Consider same-day payments. You can maximize cash flow by paying your bill the same day it is due. For example, you can make an in-person cash payment at more than 45,000 Western Union Agent locations, and receive proof of payment within minutes. Visit WesternUnion.com to find the closest agent near you.

* Learn more about credit report scores. Download a free educational brochure from Fair Isaac Corporation’s Web site, www.myfico.com.

Just a few simple steps can make a big difference in managing your finances. Once you have a plan in place, what seems like a juggling act will turn into a smooth transition.