What is wrong with the following sentence: "To maintain a good credit score, everybody should pay their bills on time".

Is there more than one way to approach this problem?

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Gramatically I would change everybody to everyone.

To address the issue in the question in order to maintain a good credit score everyone should not only pay their bills on time but they should pay their bills off. Making the min. payment on your credit cards will hurt your credit score.

pay his bill
everybody should pay their bills in time

"To maintain a good credit score everybody should pay his or her bills on time."

The indefinate pronoun antecedent everybody is singular and the pronoun their is plural so they don't agree. You need to change the pronoun to his or her so the antecedent and pronoun in agreement.