What Bills Help Build Credit and How To Make Them Count
Written by
Rudri Patel
Edited by
Emily Gadd
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When you build your credit, you create a track record that shows you pay your bills on time. A positive credit history makes it easier to get approved for credit cards, auto loans and mortgages. It also means you can rent an apartment without needing a cosigner.
Working toward building credit and creating a positive credit history means you will likely get lower interest rates. Also, remember, payment history makes up 35% of your credit score.
What Bills Help Build Your Credit?
The following bills get reported to credit bureaus automatically:
- Credit card payments
- Auto loan payments
- Mortgage payments
- Student loan payments
Late or missed payments on these bills will cause your credit score to plummet. On the other hand, making every one of these payments on time will help you get a high credit score.
Key Takeaway
Paying these bills on time not only helps you avoid late fees, but also plays a major role in building and maintaining a strong credit history.
Everyday Bills That Won’t Build Credit Unless You Set Them Up
These bills typically are not automatically reported:
- Rent payments
- Phone and internet bills
- Streaming subscriptions
- Utility bills including electric, water and gas
Reporting tools can help though. There are services that can make rent payments, utility and phone/internet bills count. Streaming services can also be added to count toward your credit history.
One option to make these payments count is to use Experian Boost or a rent reporting service to add these payments to your credit file.
How To Use Rent Payments to Build Credit
Rent payments don’t automatically show up on your credit report. To get credit for those payments, you will have to use a rent reporting service.
How Does a Rent Reporting Service Work?
- Sign up for a service that reports your rent to the credit bureaus. Note that there is often a fee.
- Keep paying your rent on time.
- This service adds your on-time payments to your credit history.
Popular Rent Reporting Tools
| Feature | RentTrack | LevelCredit | ClearNow |
|---|---|---|---|
| Setup Fee | $6.95 – $9.95 | $0 | $0 |
| Monthly Fee | $6.95 – $9.95 | $6.95 | No monthly fee (fee based on rent cycle) |
| Reporting Details | -Reports to Experian, Equifax and TransUnion. -Offers rent and utility reporting. |
-Reports rent and utilities to TransUnion and Equifax. -Tracks payments from linked bank accounts. |
-Reports to Experian. -Requires landlord to participate. -Rent is auto-deducted and reported. |
How Utility and Phone Bills Can Build Credit
Most utility and phone companies don’t report payments to credit bureaus unless you miss them. Unpaid and missed payments may push your account into collections.
However, if you don’t have a lot of opportunities to build your credit, and you always pay your utility and phone bills on time, consider using one of the reporting services in the table above.
This services link to your bank account and track payments for utilities, phone and streaming services.
Bills That Do Not Help Build Credit
There are some bills that do not impact your credit just by paying them on time. Those bills include the following:
- Medical bills
- Insurance payments
- Gym membership payments
- Subscription services
However, if any of these bills are late or unpaid, it could hurt your credit if sent to collections.
Best Practices to Use Bills to Build Credit
How you build your credit is largely in your hands. Here are some best practices you should consider:
Make Payments on Time
Making all of your payments on time is crucial. Late payments will hurt your credit score.
Sign Up for Reporting Tools
If you don’t have a lot of bills that automatically report on time payments to credit bureaus, signing up for reporting tools like RentTrack and LevelCredit can help.
However, these services come with fees. You don’t need to use them unless you’re actively trying to raise your credit score for a new inquiry.
Check Your Credit Report for Errors
Make sure you regularly check your credit report to make certain your payments show up correctly. You can check your credit report every year for free with AnnualCreditReport.com.
FAQ
Here are the answers to some of the most frequently asked questions about paying bills and impacts on your credit.- Do utility bills help build credit?
- No, not automatically. You will have to use services like Experian Boost which tracks on-time utility payments to help improve your score.
- Can paying rent build my credit score?
- Yes, if your rent is reported through a rent-reporting service or similar platform.
- What if my landlord doesn't report my rent?
- You can use a third-party service to report your rent payments.
- Which bills hurt your credit if you pay late?
- Credit cards, loans and mortgages can directly hurt your credit if paid late.
- Utility, phone and medical bills can damage your credit if they are sent to collections.
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- FDIC. "Credit Reports."
