It should come as no surprise that not paying your bills on time will negatively affect your credit score. Of course, having too many debts or other expenses is the primary reason keeping most consumers from paying their debts on time.

If you have a record of late payments and are currently having trouble keeping up, it will be difficult — if not impossible — to raise your credit score without getting your debts under control.  The steps to getting your debts under control?

*Set up a budget to get your overall expenses under control and follow the budget religiously.

*Part of the budget should be allocated towards paying down your debts systematically.

What do we mean by systematically? Most consumers allocated debt payments equally among all debts. Under a systematic program, we would focus on one debt at a time and then use the saving from the payoff of that one debt to accelerate payments on the next debt to be paid off.  It is important to select the most efficient debts to pay off in order.  This type of strategy is called a “debt roll-down” or “snowball” program.

We would be happy to lend assistance in helping you to determine which are the most efficient debts to pay off. We can even recommend a financial planner to help you develop a budget and a long-term financial plan.

If you are interested in learning more about debt payoff strategies, we also have an article entitled “Paring Down Your Debt,” available – contact us if you would like this article or more information on the topic.