How Utility Bills Can Impact Your Credit Score

Utility bills are a part of everyday life, but did you know they can also influence your credit score? At O1ne Mortgage, we understand the importance of maintaining a good credit score, especially when you’re looking to secure a mortgage. In this blog, we’ll explore how utility bills can affect your credit score and provide actionable steps to help you boost your credit. For personalized mortgage services, feel free to call us at 213-732-3074.

Are Utility Bills Reported to the Credit Bureaus?

Typically, utility companies do not report your payment history to the major credit bureaus—Experian, TransUnion, and Equifax. This means that your credit reports won’t automatically include information about your utility bill payments. However, there are ways to ensure that your on-time utility payments positively impact your credit score.

How Paying Utility Bills Can Boost Your Credit

One effective way to make your utility payments count is by using Experian Boost. This free service scans your credit card and bank account histories for on-time utility bill payments, as well as eligible rent and streaming service payments. If Experian Boost finds on-time payments, it adds them to your Experian credit report, which can improve your FICO® Score.

Payment history is the most crucial factor in your credit score, so adding more on-time payments can give it a significant lift. Importantly, Experian Boost only adds on-time payments to your credit report, so late payments won’t negatively affect your score. Here’s how to set up an Experian Boost account:

• Sign up for Experian Boost for free on Experian’s website.
• Provide your personal details like name, date of birth, and email.
• Connect your credit card and/or bank accounts that you use to pay your bills.
• Verify the payments Experian Boost finds, and choose whether to add them to your credit file.
• Check whether your FICO® Score has increased. For many users, this happens immediately. On average, Experian Boost users who saw an increase saw their FICO® Score 8 from Experian increase by 13 points.

What Utility Bills Qualify for Experian Boost?

The following utility bills are eligible for Experian Boost:

• Mobile and landline phone
• Internet
• Cable and satellite
• Gas and electricity
• Video streaming services
• Water
• Power and solar
• Trash

Rent payments can also be included, as long as you’ve made at least three payments within six months, with one payment occurring in the last three months.

Will Lenders Use My Experian Credit Score?

There’s no way to know which credit score a lender will use to determine whether to work with you. Since Experian Boost only affects your Experian credit report, it won’t influence your Equifax and TransUnion credit reports or the scores based on those reports. However, having a higher Experian credit score can still be beneficial, as many lenders do consider Experian data.

Can Utility Bills Hurt My Credit?

While on-time utility payments can boost your credit score, unpaid utility bills can have the opposite effect. Utility companies can send unpaid bills to collection agencies if you miss multiple payments or leave a bill unpaid for months. When this happens, the collection agency may report the debt to the credit bureaus, which can significantly hurt your credit score.

Additionally, the National Consumer Telecom & Utilities Exchange (NCTUE) is a specialty consumer reporting agency that collects and shares customer data, including payment history, among its 95 utility and telecommunications company members. If you have an unpaid balance with a utility provider that is a member of the NCTUE, this information may be shared with other providers, potentially affecting your ability to secure services or requiring you to pay a deposit.

The Bottom Line

Utility payments are a fact of life, but it’s possible to put them to good use. Using Experian Boost can lead to a quick uptick in your Experian credit scores if you have enough on-time payments to include in your credit report. Additionally, you can save money on utility payments by using Experian’s BillFixer tool, which negotiates with your utility providers to lower your monthly bills.

At O1ne Mortgage, we are committed to helping you achieve your financial goals. If you have any questions about how your credit score can impact your mortgage options, or if you need personalized mortgage services, don’t hesitate to call us at 213-732-3074. We’re here to help you every step of the way.