Do utility payments affect credit scores?
Quick insights:
- Utility payments generally don’t end up on your credit report, so they typically don’t generally affect your credit score.
- If you make a late payment or miss a payment altogether and your account is sent to collections, this might stay on your credit report as a negative mark for up to seven years and hurt your credit score.
- Consumers who want to add utility bill payments to their credit file might consider third-party services that could get these payments reported to the credit bureaus.
Credit scores are three-digit numbers that are used by lenders to assess someone’s creditworthiness. Credit scores can impact your ability to get approved for credit products, including what terms and conditions the lender might give you.
With higher credit scores, you may be more likely to qualify for more credit products, be able to borrow more money and qualify for more favorable terms and conditions. The opposite is true for lower credit scores. As a consumer, you may want to understand what affects credit scores. Do utility payments for things like electric, water or gas affect your credit score? Let’s find out.
Utility bills are generally not reported to the credit bureaus
Utility companies don’t routinely report monthly payments to the major credit bureaus, Experian™, Equifax® and TransUnion®. Since utility bills are typically considered non-credit accounts, on-time payments towards utility bills are not usually reflected in your credit report.
However, there are third-party services that enable consumers to add utility payments to their credit file. Keep in mind that if your utility payments are reported, so are any missed or late payments, which, in addition to this appearing on your credit report, it might negatively impact your credit score. On the other hand, making regular, on-time payments will appear on your payment history, and in turn, may help improve your credit score.
Some utility providers may report payment history if you enroll in specific programs or request it, but the reporting practices can vary by provider and region.
Utility payments may be included in your credit file
Consumers may be able to sign up for specialty services to add utility and telecom payments to their credit report. But these services are voluntary and require consumer consent.
Including utility payments may help those with thin credit files or limited credit history, so if you’re looking to build or improve your credit, and you make consistent on-time payments for your utility bills, you might consider doing this. Only certain types of utility payments—like electric, water, gas or cell phone—are typically eligible to be included using these services.
Can utility bills hurt my credit?
Utility bills may negatively impact your credit if you make late payments or fail to pay and you are sent to collections. Collection processes might affect your credit score and remain on your credit report for up to seven years or more.
Some landlords and utility companies may check your credit before providing services, so past delinquencies might also affect future access to utilities or home rentals. Paying your utility bills consistently and on time helps avoid collections and, consequently, negative marks, even if it doesn’t directly improve your score.
In conclusion
Regular utility payments generally don’t impact credit scores unless they’re reported through special services or sent to collections.
If you’re thinking of having your utility bills included in your credit report, explore your options and find out what third-party services are available.
