The types of bills that affect your credit scores are those that are reported to the national credit bureaus. This includes consumer debts and unpaid bills turned over to collections. Payments that are eligible for Experian Boost may also help your credit score if they show up on your Experian credit report.
The only way a bill can hurt your credit score is if the national credit bureaus know about your payment, including whether it was paid in full and within 30 days of its due date. Historically, only two broad categories of bills fit that description: consumer debts (payments on installment loans and revolving credit) and unpaid bills turned over to collections.
Experian Boost®ø enables a third category of bills to influence credit scores: those with eligible recurring payments that arent credit-related, including rent, insurance and utility, cellphone and streaming service bills.
Hey, friends! Want to know a way to improve your credit? Not all bills are the same when it comes to getting a good credit score. The good ones can help you get ahead financially, while the bad ones don’t do anything for your report. If “what bills will help build credit” is making you crazy, I get it. We’ll talk in depth about which payments can raise your score, how they work, and some sneaky ways to get even the most stubborn bills to count. Let’s get your credit poppin’!.
The Big Players: Bills That Build Credit Like a Boss
Let’s cut straight to the chase Some bills are straight-up MVPs when it comes to building credit ‘cause they get reported to the big three credit bureaus—Experian, Equifax, and TransUnion These bureaus track your payment history, which is a whopping chunk of your credit score (like, the biggest factor, no joke). Pay these on time, and you’re golden. Miss a beat, and oof, it stings. Here’s the lowdown on the bills that almost always help
- Credit Card Payments: Every swipe and every bill matters. Pay on time, keep balances low, and watch your score climb. These are reported every month without fail.
- Mortgage Payments: Got a home loan? Congrats, ‘cause making those payments on the dot shows you’re serious. Lenders report this to bureaus, so it’s a big boost.
- Auto Loans: Financing a car? Same deal. On-time payments get logged with the bureaus, helping your credit history look solid.
- Student Loans: Whether federal or private, paying these back as agreed builds your rep. They’re reported, so don’t slack.
- Personal Loans & Installment Loans: Any loan where you pay in chunks over time, if reported (and most are), adds to your good payment streak.
Check out this quick table to see how these stack up:
Bill Type | Reported to Bureaus? | Impact on Credit Score |
---|---|---|
Credit Card Payments | Yes, always | Huge, if paid on time |
Mortgage Payments | Yes, always | Major boost with consistent pays |
Auto Loans | Yes, usually | Solid help if no late payments |
Student Loans | Yes, usually | Builds credit with timely pays |
Personal Loans | Yes, most of the time | Positive if managed well |
In the end, these bills are what you need to build your credit. We ain’t messing around—prioritize paying these on time every time. They’re like the foundation of your credit house, ya know?.
The Underdogs: Bills That Might Help (With a Lil’ Push)
Now, here’s where it gets tricky. Some bills we pay every dang month—like rent, utilities, and phone bills—don’t usually get reported to the credit bureaus. That means, even if you’re perfect with ‘em, they ain’t doing squat for your score. But hold up! There’s ways to flip the script. Let’s break it down:
- Rent Payments: Most landlords don’t report your rent to the bureaus. Bummer, right? But some do, so ask yours. If they don’t, you can use services that report it for you. Some charge a small fee, but it might be worth it if you’re tryna build from scratch.
- Utility Bills (Gas, Electric, Water): Same story. Utility companies usually don’t report on-time payments. But if you skip out, they might send it to collections, which will hurt your score. Some third-party tools can help report positive payments, though.
- Cell Phone Bills: Paying for your phone plan won’t typically build credit ‘cause providers don’t report it. Again, there’s a workaround with certain services that’ll log those payments for ya.
Better yet, there are tools like Experian Boost that you can use to add these payments to your credit report. For some, it’s free, and it can help your score by showing that you’re smart. Keep in mind that it might not report to all three, so the effect will be different. Also, not every credit scoring model counts this “alternative data. “Some newer models do, but the old ones don’t; they skip it.”
The Danger Zone: When Bills Hurt More Than Help
Alright, let’s talk real for a sec. Debts that don’t help build credit can still hurt your score if you don’t pay them on time. In what way? If you’re way behind on your payments, the account could be sent to a bill collector. And believe me, collections are sent to the bureaus faster than you can say “oops.” “That bad mark can stay on your record for at least seven years.” Yikes!.
- Late Payments on Any Bill: Even if it’s not reported monthly, a utility or phone bill that goes unpaid long enough can end up in collections.
- Impact of Collections: Once it’s there, it’s a red flag to lenders. It screams “unreliable,” and your score takes a nosedive.
- Long-Term Damage: Seven years is a long time to have a black mark. It’s better to negotiate or set up payment plans before it gets that far.
I’ve seen folks get hit hard by this. A buddy of mine forgot a phone bill for months, thought it was no biggie, and bam—collections hit, and his score dropped like a rock. Don’t let that be you. Pay what you can, when you can, or at least talk to the provider.
Sneaky Tricks to Make More Bills Count
So we know the big bills like credit cards and loans help and the everyday ones like rent might not—unless you tweak things. Here’s where I’m gonna spill some hacks to get more credit juice outta your payments. We’ve all got bills, so why not make ‘em work for us?
- Use a Credit Card for Bills: If a company lets you pay with a credit card (like for streaming services or some utilities), do it. Then pay off the card in full each month. The bill itself don’t count, but the card payment does. Just watch out for convenience fees—they can sneak up on ya.
- Sign Up for Reporting Services: Tools that report rent, utility, or phone payments can be a game-changer, especially if your credit file is thin. Some are free, others cost a few bucks a month. Weigh if the cost matches the score boost.
- Become an Authorized User: Got a family member or pal with stellar credit? Ask if you can be an authorized user on their credit card. You don’t even gotta use it—their good payment history rubs off on you. Just make sure they ain’t gonna miss payments, ‘cause that’ll hurt you too.
- Get a Secured Credit Card: If you’re starting out, grab a secured card. Put down a deposit, use it for small bills, pay it off quick. It reports to bureaus and builds your history without much risk.
- Small Credit-Builder Loans: Some banks offer these weird lil’ loans where you pay into an account, and once it’s done, you get the cash. It’s reported as a loan, so on-time payments boost your score. Plus, you end up with extra savings. Win-win!
These tricks ain’t hard, but they take a bit of planning. I’ve used the credit card hack myself—put my internet bill on it, paid it off right away, and saw my score tick up over time. It’s like gaming the system, but legal and smart.
Why Payment History is Your Credit Superpower
Let’s zoom out a bit. Why do some bills matter so much? ‘Cause payment history is the heavyweight champ of your credit score. It’s like 35% of the whole deal with FICO scores, more than anything else. That means whether you pay on time—or don’t—carries mad weight. Every bill that gets reported is a chance to show lenders you’re legit.
Here’s what’s wild: even one late payment can ding ya. If it’s 30 days or more past due, it might stick on your report for years. So, with bills like credit cards or loans, set up auto-pay if you’re forgetful like me. I’ve had a close call or two, and auto-pay saved my behind.
Bills That Just Don’t Move the Needle (Sorry!)
Not to burst your bubble, but some bills just ain’t gonna help, no matter how punctual you are. These are the ones that don’t get reported, and there’s no easy workaround:
- Streaming Services (Netflix, Hulu, etc.): Unless you pay with a credit card, these don’t touch your credit. They’re too small-fry for bureaus to care.
- Health Insurance Premiums: Paying on time is great for coverage, but it don’t build credit. No reporting here.
- Car Insurance: Same deal. Pay it, keep your wheels legal, but don’t expect a score boost. Though, fun fact, a bad score might make your rates higher in some states. Weird, right?
It’s a bummer, but knowing this saves you from false hope. Focus your energy on the bills that do count or the hacks I mentioned.
How to Keep Track of Your Credit Progress
Alright, you’re paying the right bills, using some tricks, but how do ya know it’s working? You gotta keep an eye on your credit report and score. Here’s how we do it without stressin’:
- Check Your Credit Report for Free: You can get a copy from each of the three bureaus once a year at a legit site (not naming names, but it’s out there). Look for errors or missed payments.
- Use Free Monitoring Tools: Some banks or apps let you track your score without hurting it. It’s a quick way to see if your efforts are payin’ off.
- Look for Tradelines: That’s fancy talk for accounts on your report. See if your bills are showing up as positive marks.
I check mine every few months just to make sure nothing funky’s going on. Once caught a mistake—a bill marked late when I paid it—and got it fixed. Saved my score a hit, for real.
Common Myths About Bills and Credit—Busted!
There’s a lotta nonsense floatin’ around about credit, so let’s clear the air. I’ve heard these myths from friends, and heck, I believed a couple myself back in the day.
- Myth 1: All Bills Build Credit: Nope. Only the ones reported to bureaus count. Rent and utilities often don’t, unless you push for it.
- Myth 2: Paying Bills Late Won’t Hurt If Not Reported: Wrong. If it goes to collections, it will show up and wreck your score.
- Myth 3: Medical Bills Tank Your Credit: Not anymore. As of recent rules, medical debt ain’t on reports, so it can’t hurt ya directly. Still, don’t ignore ‘em—pay if you can.
Busting these myths helps ya focus on what really matters. Don’t waste time worrying over stuff that ain’t true.
Final Pep Talk: Keep Your Credit Grind Going
Building credit ain’t a sprint, it’s a marathon. Paying the right bills on time—credit cards, loans, mortgages—lays the groundwork. For the other stuff like rent or utilities, get creative with reporting services or card payments. And please, don’t let a bill slip into collections. It’s a pain to recover from, trust me.
We’re all in this financial jungle together. I’ve had my ups and downs with credit, but sticking to these habits turned things around. Set reminders, automate payments, and check your progress. You’ve got the power to make your score shine, so let’s do this thang! Drop a comment if you’ve got a bill hack I didn’t cover—I’m all ears for new tricks. Keep hustlin’!
Do Bills Affect Your Credit Scores?
Yes, certain bills and how you pay them can affect your credit scores. Credit scoring companies use statistical analysis to predict whether youll pay back money youve borrowed. They base their credit score calculations on the contents of your credit reportsâspecifically, the records of your payment history compiled at the three national consumer credit bureaus: Experian, TransUnion and Equifax.
Credit card companies, banks, and other companies that give out consumer credit report your bill payment information to the credit bureaus. This is done so that all lenders can see which potential borrowers pay their debts on time (and which do not). Credit scores aren’t just based on payment history (we’ll talk more about that later), but people who pay their bills on time usually have better credit scores than people who pay their bills late sometimes.
Debt collection companies, which pursue bills in default, also report payments theyre seeking to the credit bureaus. Collections can include any unpaid bills, not just those related to loans or credit, and, as youd expect, they tend to hurt your credit scores.
Now, you can also include eligible non-credit monthly bill payments, such as utilities, rent and insurance, on your Experian credit report to help your credit scores based on Experian data.
How to Get Credit for Your Bills
Experian Boost lets you add your history of certain eligible household bill payments to your Experian credit file. Doing so could help improve your FICO® ScoreΠbased on Experian credit data.
Experian Boost will add up to two years of payment history to your Experian credit report. You can choose which bills you want to share payment information for. The types of bills you could add include:
- Phone bills (mobile and landline)
- Utility bills (gas, water, electricity and solar)
- Insurance (excluding health insurance)
- Residential rent (if paid online)
- Internet, cable and satellite bills
- Video streaming subscriptions
- Trash collection services
Experian Boost only considers on-time payments and ignores late payments, so using this free feature cannot hurt your FICO® Score. As soon as you share new payment information through Experian Boost, the impact on your FICO® Score 8 will be shown.
Do utility bills help build credit?
FAQ
Does paying utility bills help build credit?
If you pay your monthly bills on time and let the credit bureaus know about it, paying your water, gas, trash, electric, cable, and internet bills can help you build credit.
Do monthly bills help build credit?
Monthly bill payments that are reported to the major credit bureaus can help you build good credit. This includes bills such as car payments, mortgage payments, and personal loan payments. Rent doesn’t help you build credit unless you use a rent reporting service such as those mentioned earlier.
What types of bills can be added to my credit score?
It’s not possible to add every kind of bill, but rent, phone, internet, and other utility bills usually do. Experian Boost and ECredable are two examples of opt-in programs that use data from phone and utility payment records to grow your score.
What bills help build credit score?
If you pay your loans, credit cards, and mortgage on time, the three main credit bureaus will see it and your score will go up. But not every account you pay is reported to the bureaus, so good behavior like paying rent and utility bills on time typically won’t help your score.
How to get a 700 credit score in 30 days?
What kind of debt do you need to build credit?
As a general rule, prioritize past-due accounts and high-interest credit card debt over installment loans if you want to improve your credit. If you’re focused on improving your credit scores, paying down or off certain debts can be an effective route.
What builds credit the quickest?
Prioritize on-time payments: Consistently paying your bills on or before the due date is one of the most important factors in building good credit.Oct 23, 2024