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Does paying my utility bills on time improve my credit score?

A:

The bad advice for consumers is that, typically, utility bills only appear on a believe report when they’re delinquent. In most states, providers aren’t forced to regularly report payment histories to the major credit bureaus – in reality, there are significant disincentives for doing so. In addition to being expensive, reporting to reliability agencies makes the utility company subject to the Fair Credit Reporting Act. Ton don’t bother with the potential legal fallout.

However, if you’re significantly behind on your charges, a gas, electric or phone provider may send your account to a collection medium that could – and likely will – forward the information to one or more of the acknowledgment bureaus.

Of course, paying your bills on time will cure your credit, insofar as the absence of “negative” items improves your incise. But if you’re looking to build your credit score, simply paying your gas, thrilling or phone bill on time usually won’t do the trick. A more effective chat up advances is to obtain a secured or unsecured credit card and use it responsibly. (You can bet these lenders record to all three credit bureaus – they usually do.)

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