If you keep up with your utility and phone bills and that activity is reported to credit bureaus, it could help boost your credit. But keep in mind, those bills are just one possible factor in credit scoring. And falling behind on them or other bills could have negative effects.
Utility Bills
Your electricity or gas bill is not a loan, but failing to pay it can hurt your credit score. While utility companies won't normally report a customer's payment history, they will report delinquent accounts much more quickly than other companies you may do business with.
Credit scores can be improved in many ways, but paying utility bills on time is usually not enough to make a meaningful difference. While gas, electric, and water are common utility bills that people pay, the information is not reported to the credit agencies and does not appear on an individual's credit report.
Paying utility and cable bills on time won't help your credit, though, because most utilities don't report to the credit bureaus. As with other recurring bills, however, if you put them on a credit card and pay on time, that builds a good payment history and helps your score.
Does paying rent build credit? Simply paying your rent will not help you build credit. But reporting your rent payments can help you build credit — especially if you are new to credit or do not have a lot of experience using it. Having rental payment information in your credit report can be useful if you rent again.
Will paying my phone bill build credit? The short answer: No, paying your phone bill will not help you build up credit. Phone bills for service and usage are not usually reported to major credit bureaus, so you won't build credit when paying these month to month.
Payment History Is the Most Important Factor of Your Credit Score. Payment history accounts for 35% of your FICO® Score. Four other factors that go into your credit score calculation make up the remaining 65%.
The Takeaway. It usually takes a minimum of six months to generate your first credit score. Establishing good or excellent credit takes longer.
Your score falls within the range of scores, from 300 to 579, considered Very Poor. A 564 FICO® Score is significantly below the average credit score.
Rent payment history, in general, affects around 35% of your overall credit score. So, even a single late rent payment or missed rent payment can significantly impact your credit score — especially if it's already on the higher side.
As you make on-time loan payments, an auto loan will improve your credit score. Your score will increase as it satisfies all of the factors the contribute to a credit score, adding to your payment history, amounts owed, length of credit history, new credit, and credit mix.
Your score falls within the range of scores, from 300 to 579, considered Very Poor. A 541 FICO® Score is significantly below the average credit score.
One way to do this is by checking what's called the five C's of credit: character, capacity, capital, collateral and conditions. Understanding these criteria may help you boost your creditworthiness and qualify for credit.
Pay on time.
One of the best things you can do to improve your credit score is to pay your debts on time and in full whenever possible. Payment history makes up a significant chunk of your credit score, so it's important to avoid late payments.
The average credit score in the United States is 698, based on VantageScore® data from February 2021. It's a myth that you only have one credit score. In fact, you have many credit scores. It's a good idea to check your credit scores regularly.
Trying to qualify for an auto loan with a 564 credit score is extremely expensive, if not downright impossible. There's too much risk for a car lender without charging extremely high interest rates. Even if you could take out an auto loan with a 564 credit score, you probably don't want to.
In general, the bills that factor into your credit score are for your credit cards and loan payments. Other bill payments—including rent, cell phone plans, utilities or medical bills—are not typically included in your score.
The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those bureaus. This means a couple of things: The scores we provide are actual credit scores pulled from two of the major consumer credit bureaus, not just estimates of your credit rating.