Do Monthly Bill Payments Affect My Credit Score?

Personal Finances

You’re working on improving your credit score and being extra careful about paying the bills on time. But, since you don’t see these payments reflected in your score, you might be wondering: Do monthly payments, like utility bills, count towards a credit score? 

Unfortunately, making your monthly payments will not affect your credit score.  However, if you’re delinquent on a monthly utility bill then yes, your credit score will be negatively affected.

The good news is there are a few ways to make your payment behavior count. Read on for four steps that can help your on-time monthly payments boost your credit score. 

1. Use a Rent-Reporting Service 

Your monthly rent payments can reflect positively on your credit score, but only if the credit bureaus know you’re paying your rent on time. They won’t accept this information from consumers, but you can sign up for a rent-reporting service.  The service will then pass on this information to one or two of the three major credit bureaus. Some of these services are free, though most charge for the service, with fees of up to $100 a year. 

Here’s a quick overview of some of the more popular rent-reporting services: 

  • Rent Reporters: For a one-time enrollment fee of $94.95, your rent payments are reported to TransUnion and Equifax for two full years. If you want to continue with the service after the initial two-year period, the cost is $9.95/month.
  • Rental Kharma: You’ll pay $25 for the initial setup and then $6.95/month. Rent reporting through this option is shared only with TransUnion.
2. Sign up for Experian Boost

Since early 2019, the Experian credit bureau has offered consumers the opportunity to have utility bills reflected on Experian credit scores. To sign up for the service, Experian requires access to your checking account information so the agency can identify your bill payments. Once it’s found the relevant information, Experian will ask you to verify the details and to confirm that you want this information included in your credit report. Once consent is received, your credit score boost will happen instantly. 

Experian Boost only accepts on-time payments and, consequently, can only improve your score. However, if you neglect to pay any reported bills for three consecutive months, the change in your score will be reversed and will fall back to its previous level. 

It’s also important to note that Experian Boost only increases your Experian score. It does not affect your Equifax or TransUnion scores. 

3. Use SimpleBills

SimpleBills is a service that currently reports utility bills to Equifax, with plans to include TransUnion and Experian in the future. The credit-reporting service charges $2.99/month and can be helpful for those who want to improve their score for building a credit history to qualify for a credit card or a loan payment. 

Unfortunately, while your Equifax number may see an increase through SimpleBills, major score algorithms, like FICO and Vantage, might not consider this data when calculating your score. 

4. Go Off the Beaten Track 

If none of these options sound attractive to you, consider going the unconventional route by seeking an alternative rating. 

Alternative scores, like the FICO XD Model, will include information like your cable, rent, insurance, phone, utility, and student loan payments when calculating your credit score. Some alternative scores will integrate this data on their own.  Others allow you to self-report these payments, sometimes for a nominal fee. 

Alternative scores can help individuals appear responsible for prospective employers and landlords.  However, they won’t do much to build your real credit history or to make you eligible for a large loan. 

If you’re serious about improving your score, you can take one or all of the steps outlined here to help your on-time bill payments boost your numbers. For the most significant impact on your score, make sure you are paying all your credit card bills on time, preferably in full. Don’t open any new cards while working on improving your score, and keep your credit utilization low.