Do Utilities Build Credit? Unpacking the Facts and Myths

Utility companies typically don’t report your payment history to the credit bureaus. But paying utility bills on time can help your credit score when you use Experian Boost. This tool specifically integrates gas, electric, water and other utility payments into your Experian credit report and scores.

When you use a service like Experian Boost® that specifically incorporates utility bills into your credit score, it can positively impact your score. Otherwise, utility companies typically dont report your payment history to the credit bureaus.

Here are some things to consider about utility bill payments and credit, as well as actions you can take to improve your score with timely payments.

The question of whether utilities build credit has been swirling around for a while, leaving many consumers confused. While it’s not a straightforward yes or no, the truth is, paying your utility bills on time can potentially give your credit score a boost.

The Lowdown on Utility Bills and Credit Scores

Traditionally credit scores have relied heavily on factors like credit card payments, loans, and other forms of debt. However, the landscape is shifting and alternative data, such as utility payments, is starting to play a role.

Here’s the catch: not all utility companies report payment history to credit bureaus. This means your on-time payments might not automatically translate into credit score improvements.

But fear not! There are ways to leverage your responsible utility bill payments to enhance your credit standing

Experian Boost: Your Utility Bill Credit Booster

Enter Experian Boost, a free tool that allows you to connect your utility and phone bills to your Experian credit report. This essentially gives credit for your on-time payments potentially leading to a credit score increase of up to 13 points.

Here’s how it works:

Sign up for Experian Boost: It’s free and easy to do on Experian’s website.
Connect your accounts: Provide your bank account or credit card information used to pay your utility and phone bills.
Verify payments: Experian will scan your accounts for on-time payments.
Boost your score: If eligible, your on-time payments will be added to your Experian credit report, potentially giving your score a lift.

Note: Experian Boost only affects your Experian credit score, not your TransUnion or Equifax scores.

Other Ways to Build Credit with Utility Payments

If your utility company does not report to credit agencies, you can still take advantage of your timely payments:

Consider a third-party reporting service: Some companies specialize in reporting alternative data like utility payments to credit bureaus. However, be mindful of potential fees and limitations.
Maintain a good payment history: This is crucial regardless of whether your payments are reported or not. Late or missed payments can negatively impact your credit score.

The Bottom Line: Utilities and Credit Building

Paying utility bills on time is a responsible financial habit, even though it may not always directly improve credit. Furthermore, you can use services like Experian Boost to make the most of your on-time utility payments in order to possibly raise your credit score.

Remember, building credit is a marathon, not a sprint. Consistent responsible financial behavior, including paying your bills on time, will ultimately contribute to a healthy credit score.

Bonus Tip: Monitor your credit reports regularly to ensure accuracy and identify any potential issues. You can access free credit reports from all three major credit bureaus (Experian, TransUnion, and Equifax) at AnnualCreditReport.com.

Are Utility Bills Reported to the Credit Bureaus?

Utility companies do not automatically include payment history information in your credit reports because they do not routinely share that information with Equifax, TransUnion, and Experian credit bureaus.

Paying your utility bills on time will earn you credit with Experian Boost, a free service that can raise your credit score. Its only available for your Experian credit report and can boost your FICO® Scores☉ based on Experian data. Accordingly, utility bills won’t have any impact on your credit scores, which are derived from your Equifax and TransUnion credit reports.

Will Lenders Use My Experian Credit Score?

Theres no way to know which score a lender will use to determine whether to work with you. However, since Experian Boost has no effect on your credit files with Equifax or TransUnion, you can be sure that your utility bill payments won’t be taken into account when a lender uses a score derived from information from those credit reporting agencies.

Do utility bills help build credit?

FAQ

Do utilities increase your credit score?

Utility bills can help your credit score when you use a service that specifically integrates them into your score, such as Experian Boost^®^ø. Otherwise, utility companies typically don’t report your payment history to the credit bureaus.

What bill helps build credit?

Paying utilities, rent and cell phone bills can help build credit if they’re reported to the credit bureaus.

Does paying rent and utilities build credit?

“Paying rent can build credit if your payments are reported,” says Rod Griffin, senior director of consumer education and advocacy for the credit bureau Experian. “Unfortunately, that’s not the norm, as most landlord and rent management companies don’t report rent payments.”

Does paying bills on time raise your credit score?

1. Make your payments on time. Paying your bills on time is the most important thing you can do to help raise your score. FICO and VantageScore, which are two of the main credit card scoring models, both view payment history as the most influential factor when determining a person’s credit score.

Do utility companies report Unpaid bills to credit bureaus?

Most utility companies will not report your payment history to the three credit bureaus, because you’re paying for services rather than meeting payments on a line of credit. However, utility companies and landlords are very likely to enlist a collections company to chase up any unpaid bills, and collections do get reported to the bureaus.

Do utility bills help your credit score?

Utility bills can help your credit score when you use a service that specifically integrates them into your score, such as Experian Boost ®ø. Otherwise, utility companies typically don’t report your payment history to the credit bureaus.

Does paying utility bills on time help your credit?

Paying utility and cable bills on time won’t help your credit, though, because most utilities don’t report to the credit bureaus. As with other recurring bills, however, if you put them on a credit card and pay on time, that builds a good payment history and helps your score. Failure to pay can result in your account going to collections.

Do utility bills show up on credit reports?

Utility companies don’t regularly share your payment history with the credit bureaus (Experian, TransUnion and Equifax), so your credit reports won’t automatically include that information. Experian Boost, a free feature, will give you credit for making utility bill payments on time, which can help improve your credit score.