A:

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

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

Of course, paying your bills on time will help your credit, insofar as the absence of "negative" items improves your score. But if you're looking to build your credit score, simply paying your gas, electric or phone bill on time usually won't do the trick. A more effective approach is to obtain a secured or unsecured credit card and use it responsibly. (You can bet these lenders report to all three credit bureaus – they usually do.)

RELATED FAQS
  1. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
Related Articles
  1. Personal Finance

    The Top Three Credit Bureaus

    A discussion of the top three credit bureaus: what they do, how they develop your credit score – and why the credit scores they assign you may differ.
  2. Personal Finance

    Credit Repair: How to Improve Your Credit Score

    There is no quick fix for a bad credit score, but there are several strategies you can take to improve your credit rating and save money over the long term.
  3. Investing

    Millennials: Prevent a Bad Credit Score

    Here are five ways to help prevent getting a bad credit score that could affect future loan, credit card or mortgage approvals.
  4. Retirement

    6 Methods to Maintain a Healthy Credit Score During Retirement

    Learn how to improve your credit score during retirement. Your credit score still matters in retirement, and these tips can give it a boost.
  5. Personal Finance

    5 Ways to Up Your Credit Score in 90 days or Less

    Getting that credit report glowing again may be easier than you think. Read on for some quick fixes.
  6. Personal Finance

    7 Things You Didn't Know Affect Your Credit Score

    Having a good credit score plays a big part in being approved for a loan or a mortgage. Here are some things to watch for to keep your credit score healthy.
  7. Personal Finance

    Five Easy Ways to Improve Your Credit Score

    If you credit score isn't where you want it to be, use these five steps to improve it.
  8. Personal Finance

    How Your Credit Score Compares to the Average American's

    While only a small percentage of Americans have terrible credit scores, a whopping 30% have poor or bad credit, according to the Consumer Financial Protection Bureau.
  9. Personal Finance

    6 Benefits of Increasing Your Credit Limit

    If you can resist the urge to overspend, then raising your credit limit could benefit you in various ways.
  10. Investing

    How To Boost Your Credit Score To Save Thousands

    One of the first steps you should follow before buying a home is to boost your credit score. And how do you do that? Here, we tell you how.
RELATED TERMS
  1. Credit Utilization Ratio

    An input used in determining a person's credit score. It is the ...
  2. Credit Score

    A credit score is a number ranging from 300-850 that depicts ...
  3. Consumer Credit File

    A collection of data about an individual’s borrowing and repayment ...
  4. Credit Mix

    The types of accounts that make up a consumer’s credit report. ...
  5. Negative Information

    Data in a consumer’s credit report that lowers his or her credit ...
  6. Bad Credit

    A qualification of an individual's credit history that indicates ...
Trading Center