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.)

Key Takeaways

  • Generally, utility bills appear on a  credit report when they're delinquent.
  • If you have long-overdue bills, a utility company can send your account to a collection agency that can forward it to one or more of the credit bureaus.
  • If you want to build your credit score, simply paying your utility bill on time usually won't do the trick. A secured or unsecured credit card may be a better option.