Paying your bills on time is one of the most basic pieces of financial advice, but did you know your regular utility payments can actually help you build your credit score? While most people assume that only credit cards and loans affect their credit, new tools and industry changes are making it possible to turn everyday bills—like electricity, water, and even your phone—into credit-building opportunities. Here’s how you can use your utility bill payments to give your credit score a real boost. check out best credit score hacks.
The Traditional Role of Utility Bills in Credit Reporting
Historically, utility companies haven’t reported on-time payments to the major credit bureaus. That means, under normal circumstances, paying your electric or water bill on time wouldn’t help your credit score. The only time utility bills would show up on your credit report was if you missed payments and your account was sent to collections—a situation that could seriously hurt your score.
The Game Changer: Experian Boost
Enter Experian Boost, a free service designed to help consumers get credit for bills that previously went unrecognized. With Experian Boost, you can add positive payment history from utility, telecom, and even streaming service bills directly to your Experian credit file. Eligible payments include electricity, water, gas, internet, cell phone, and select streaming services.
Step-by-Step Guide: Using Experian Boost
Want to get started? Here’s how:
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Sign Up: Visit the Experian website and create a free account.
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Connect Your Accounts: Link the bank accounts or credit cards you use to pay your utility bills.
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Review Payments: Experian will scan your transactions for eligible utility and telecom payments.
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Add to Credit File: Select which payments you want to include, and confirm your choices.
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See Your Score Update: Experian will instantly update your FICO Score 8 based on the new data.
Many users see an immediate increase in their Experian credit score after using Boost.
How Much Can Your Credit Score Increase?
While results vary, Experian reports that users who receive a boost see an average increase of 13 points in their FICO Score 8. Keep in mind, however, that this boost only applies to your Experian-based credit scores. Lenders who use Equifax or TransUnion won’t see these utility payments reflected.
Other Ways to Leverage Utility Payments for Credit Building
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Pay Utilities with a Credit Card: If your utility provider allows it without extra fees, consider paying with a credit card. This way, your on-time payments help both your credit card and utility history—just be sure to pay off the card in full each month.
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Explore Alternative Credit Tools: Some lenders and fintech companies are beginning to use alternative data, like utility payments, in their credit decisions. Research options in your area for additional opportunities.
Best Practices for Utility Bill Payments
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Pay On Time: Avoid late payments and collections at all costs, as these can harm your credit.
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Set Up Auto-Pay: Use automatic payments or reminders to ensure you never miss a due date.
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Monitor Your Credit: Regularly check your credit report for errors and to ensure your positive payment history is being reported.
The Future of Utility Payments and Credit Scoring
Credit scoring models are slowly evolving to include more types of data, giving consumers greater control over their financial reputation. As regulators and industry leaders push for more inclusive credit reporting, expect utility payments to play an even bigger role in the future.
Conclusion
While utility bills haven’t always helped your credit, new tools like Experian Boost are changing the game. By taking a few simple steps, you can ensure your responsible utility payments help you build a stronger financial future. Start today, and turn your everyday bills into a credit score hack that really works. check your Personal Financial Scores.
