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kysin2014
Posts: 96
Registered: ‎11-08-2010

Does Paying Utility Bills On-Time Help Credit Score?

Does Paying Utility Bills On-Time Help Credit Score?  Is it a fact or a myth?

 

 


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Senior Contributor
laz98
Posts: 4,291
Registered: ‎09-06-2008

Re: Does Paying Utility Bills On-Time Help Credit Score?

only if they report, & most do not.

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stan_the_man
Posts: 855
Registered: ‎06-29-2010

Re: Does Paying Utility Bills On-Time Help Credit Score?

If you don't pay your bill and it gets charged off (turned over to collections), there is a near certain likelihood that this delinquency will be reported and it will hurt your score a lot.

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MattH
Posts: 3,245
Registered: ‎04-03-2008

Re: Does Paying Utility Bills On-Time Help Credit Score?

 


jinswaz wrote:

Does Paying Utility Bills On-Time Help Credit Score?  Is it a fact or a myth?

 

 


 

As others have said, most utility companies only report negative information: if you pay on time that fact will not appear on your credit history, but if you do not pay on time that fact is highly likely to appear on your credit history and therefore have a negative impact on your score.  I happen to get my electric power delivered by a utility that does report positive information, so it always has appeared on my credit history.  Strangely enough, the way they code it is verbally described by one of the Big Three credit reporting agencies as "other" and by the other two as "installment loan" so it looks like a small installment loan (with a perfect payment history) to the scoring models.  Of course any human reviewing the file would likely recognize it for what it is by the company name.  But my natural gas company has never appeared on my credit history.

 

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PhillyGuy215
Posts: 165
Registered: ‎03-22-2009

Re: Does Paying Utility Bills On-Time Help Credit Score?

Few utilities report for standard types of accounts.

 

However, SOME utilities will regularly report (like gas and electric) if you subscribe to a payment-smoothing plan even if they don't do it for normal accounts.     Gas and Electric companies offer these types of budget billing.    In budget billing, they first hit you with an INQ when you sign-up to make sure you're not a risk, then when your utilization is low you pay more than your normally would (like $150 when your gas bill in the summer is normally $40).   

 

In the high utilization months you pay a discount over what you are normally charged ($150 instead of $298) because you prepaid for that usage earlier in the year.   The utility companies aren't really extending you any credit here except if you sign up right at the point where your bills are normally higher, but the oscillation goes back to the utility company's favor when your bill would normally be very low.

 

 

Most utility companies though will gladly report delinquencies.

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Senior Contributor
MattH
Posts: 3,245
Registered: ‎04-03-2008

Re: Does Paying Utility Bills On-Time Help Credit Score?

 


PhillyGuy215 wrote:

Few utilities report for standard types of accounts.

 

However, SOME utilities will regularly report (like gas and electric) if you subscribe to a payment-smoothing plan even if they don't do it for normal accounts.     Gas and Electric companies offer these types of budget billing.    In budget billing, they first hit you with an INQ when you sign-up to make sure you're not a risk, then when your utilization is low you pay more than your normally would (like $150 when your gas bill in the summer is normally $40).   

 

In the high utilization months you pay a discount over what you are normally charged ($150 instead of $298) because you prepaid for that usage earlier in the year.   The utility companies aren't really extending you any credit here except if you sign up right at the point where your bills are normally higher, but the oscillation goes back to the utility company's favor when your bill would normally be very low.

 

 

Most utility companies though will gladly report delinquencies.


I've never signed up for any payment equalization plan, nor done anything else unusual, they just report anyway I guess.

 

 

TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Valued Contributor
my-own-fico
Posts: 1,122
Registered: ‎01-05-2010

Re: Does Paying Utility Bills On-Time Help Credit Score?

So if you can get your utility companies to report, your AAoA could potentially increase considerably?

 

Senior Contributor
MattH
Posts: 3,245
Registered: ‎04-03-2008

Re: Does Paying Utility Bills On-Time Help Credit Score?

 


my-own-fico wrote:

So if you can get your utility companies to report, your AAoA could potentially increase considerably?

 


Well, that would depend on how recently you've moved versus how long you've had your other accounts.  In my case, my wife and I bought our current residence in 2002 and we've had all our credit cards since the 20th century so I believe this lowers our average age of accounts by a small amount.

 

 

TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Super Contributor
marty56
Posts: 5,679
Registered: ‎10-06-2007

Re: Does Paying Utility Bills On-Time Help Credit Score?


MattH wrote:

 


my-own-fico wrote:

So if you can get your utility companies to report, your AAoA could potentially increase considerably?

 


Well, that would depend on how recently you've moved versus how long you've had your other accounts.  In my case, my wife and I bought our current residence in 2002 and we've had all our credit cards since the 20th century so I believe this lowers our average age of accounts by a small amount.

 

 


IMHO those who's job require them to move a lot won't like their cable, electric and other util accounts to report and effect their credit history.

09/12/2013 FICO: EQ: 772 EX:813 TU:752
Valued Contributor
my-own-fico
Posts: 1,122
Registered: ‎01-05-2010

Re: Does Paying Utility Bills On-Time Help Credit Score?

Sure, it can go either way depending on the specifics.

 

If you move, but stay with the same utility co without a gap in time, is the opened date likely to follow the former or the latter?

 


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