The bills that directly affect your credit score are credit card and loan payments. Utility bills and rent payments typically don’t, but they can if you fall behind or if your positive payment history is reported to credit bureaus.
Your FICO or VantageScore credit score is developed from the material supplied by your creditors and contained in your credit file at one of the three major credit reporting bureaus: Experian, TransUnion or Equifax.
So, if you miss any payment it would follow that your creditor would report you as late and your score would sink … right? Well, not always, and here is why: not all creditors report data to the credit bureaus!
Also, depending on which version of the credit score (i.e. FICO 7, 8 or 9; VantageScore 3.0 or 4.0) is being used to generate your score, your credit bureau data may be supplemented by adding consumer-supplied positive data through programs like Experian Boost or UltraFICO. Let’s discuss reporting first and then we will look at supplemental data.
Why don’t all creditors report to credit bureaus?
The answer is not in your stars but in their wallets.
Every time your creditors report data to a bureau, they have to pay a fee. Some lenders don’t think that this step is worth the expense. Others don’t see themselves as lenders. They may order a credit report before approving your loan or doing business with you, but they want to save as much profit as they can. Typically, these non-reporters include:
- Credit unions: They look to save money where they can, so some may report to only one bureau and not all three.
- Utilities: They don’t see themselves as lenders, so they don’t use credit reports to hook you up. They also usually don’t report unless you pay very late.
- Tradespeople: They aren’t lenders, they are craftsmen. Until recently, liens or suits for old bills would show on your credit reports as public records. But this reporting practice has ended.
- Doctors and hospitals: They don’t consider themselves lenders but medical artists, so they usually don’t pay to report unless they send a bill to an outside collector. Collectors, on the other hand, love to report you to the bureaus.
- Local finance companies: They may not report to a bureau, but they may come visit you if you’re late.
- Landlords: Most don’t report to credit bureaus, but they may report to a rent bureau. However, the larger high-volume landlords are now able to report rental payments directly to the credit bureau each month. TransUnion, for example, requires a landlord to have at least 100 accounts before reporting tenant data. Some landlords with 500 or fewer units may report to a rent bureau (like Experian’s RentBureau service).
- Insurance companies: They don’t report to the bureaus but may report to specialized bureaus like the Medical Information Bureau or C.L.U.E. (not the board game, but the Comprehensive Loss Underwriting Exchange). The impacts of paying late, however, could end up increasing your rates.
Why you should pay all of your bills on time
Before you get too excited about the possibility of some late bills being under the radar, I urge you to remember that your score is a reflection of your financial life based on your payment history. So, if your financial life is going through a crisis, expect that your credit report and score will eventually begin to show signs of that. Trying to cover it up by robbing Peter to pay Paul won’t work for long unless you make whatever changes are necessary in your life to actually pay all your bills on time.
At the risk of repeating myself, the most important thing you can do for your credit score (35% of your FICO score) and your overall financial health is to pay your bills as agreed, on time, every time. So, while not all bills count the same in scoring terms, they do in your nonscoring, real-time, flesh-and-blood life.
Remember that even bills that aren’t typically reported to the bureaus may do so if you are very late or become delinquent. The key thing to remember is that bad behavior will likely hurt your credit score quickly, while good behavior may not do much for your score in the short term.
Utility bills are a prime example – paying your electric bill or cable bill on time ensures that your TV has power and you can watch your favorite series, but most providers don’t report your on-time payments to the credit bureaus.
However, if you are chronically late you risk sitting in the dark with no entertainment and you may have to pay a reconnection fee to get turned back on. To add insult to injury, if you are late enough, your electric company might decide to report your delinquency to the credit bureaus. Double whammy!
The above scenario could be replayed for any utility-type bill, from gas and water to cable and internet. Another regular expense that you might think would affect your score are insurance payments, but since insurers don’t see themselves as lenders, they don’t report late payments to the credit bureaus.
However, you may find yourself without insurance and end up having to pay more to get covered again or even risk being uninsured if you pay outside of your grace period. So, the consequences can be severe to your everyday real life whether or not a late payment is hurting your credit score.
How to get your bill payments reported to credit bureaus
I’ve talked before about ways to get utility bills and banking history reported through programs like Experian Boost, UltraFICO and rent payment services, but let me summarize these programs for you again.
Experian Boost users must allow Experian to scan their bank account transactions to identify utility and cellphone payments. Information about payments then appears in your Experian credit report (not the other two) and is used when your Experian credit score is calculated from that data. Remember there are three bureaus with different data on you, and so you may have a different score at each. Boost only uses positive payment history, so missed utility or cellphone payments will not hurt your score.
UltraFICO is a soon-to-be launched credit score now in a pilot phase. It is expected to help your score if you need some extra points to qualify for a financial product or for the best terms available. It is an opt-in product using data (such as how much you have in savings, how long your accounts have been open and how active they are) from your checking, savings or money market accounts to supplement data already in your credit report.
Right now, both Boost and UltraFICO influence only your Experian credit report and scores derived from that data and only with the more up-to-date scoring versions. There are different versions of your credit scores, such as FICO 8 (the most commonly used score) and VantageScore 3.0.
Lenders would see the effects of Boost and UltraFICO only if they view your Experian credit report or pull your FICO 8, FICO 9, VantageScore 3.0 or VantageScore 4.0 credit scores using Experian data.
See related: Is Experian Boost safe?
How to get your rent payments reported to the credit bureaus
There’s not a direct way for you to report rent payments to credit bureaus on your own. However, you or your landlord can use a reporting service to send information about your monthly payments to bureaus. Before signing up with a reporting service, make sure you know how much you’ll have to pay and which credit bureaus the service reports to. Some of the big ones are:
- Experian RentBureau: They will report your payment history to Experian for incorporation into your credit report with the bureau. If your landlord doesn’t report through RentBureau, you can also sign up through a rent payment service that does, such as RentTrack, PayYourRent or Cozy.
- Rental Kharma: They report rent payments to TransUnion. Rental Kharma verifies your payment history with your landlord or property manager, and includes six months of past rent payments in its reporting. There’s a $50 startup fee to begin using the service, after which you’ll pay $8.95 per month.
- RentReporters: Data about your rent payments is sent to two credit bureaus, TransUnion and Equifax. RentReporters tracks your rent payments by contacting your landlord directly to verify that on-time payment has been made. The sign-up fee is $94.95, which will get you two years of past rent data reporting, then $9.95 per month to maintain the service.
See related: How to build credit without a credit card
When it comes to how your bills affect your credit score, please remember that the consequences of not paying your bills can be serious beyond their effects on your score. These actions have an impact on your lifestyle as well as your credit score and your overall financial health.
Remember to keep track of your score!