Raise a Credit Rating with Utility Bills

Posted by: Meredith K. | Mar 10,2008


One thing people might not realize is that there are a lot of issues that determine a credit rating besides paying off credit card bills and other loans.  Your utility bills can also raise or lower your credit rating, depending on whether or not you’re responsible with paying bills.  I’ve seen countless roommate situations where one person has her name on the phone bill, for example.  It’s that person’s responsibility to get a household’s or apartmenthold’s worth of people to pony up.  It can be pretty frustrating and it can be very damaging if one roommate is far from responsible with making payment.  Maybe the bill will default, or maybe the account-holder will have to foot the bill.  Either case is not very desirable.  

This can affect a credit rating or at the very least affect the ability to get utility service in the future.  Let’s look at your credit rating.  Suppose you’re on your own and you want your utility bills to count towards your credit rating?  Don’t necessarily assume that utility bill payments will be reported to credit bureaus in the same way as credit card payments.  The online bill payment firm Billeo, for example, has a program that reports all bills to an alternative credit bureau.  

The word “alternative” should be a bit of a red flag.  If the bills get reported to an alternative bureau, this could potentially mean that these bills, and ensuing credit history, will not be recognized by the major bureaus of Experian, Equifax, and TransUnion.  So it’s important that your bills payments are recognized by the big three.  

Generally this is the case, so you will not necessarily have to lay any extra groundwork.  Remember, it’s important to pay all your bills on time, not just those that require interest payments.  If you’re concerned about building a credit rating, or repairing a damaged rating, there are credit cards that report to all the credit bureaus after every payment, ensuring that your responsible payments will elevate your rating as quickly as possible.  

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