Do Utility Companies Report to Credit Bureaus?
Understand if and how your utility payments affect your credit score, including negative marks and ways to build positive history.
Credit reports detail an individual’s financial behavior, influencing access to loans, housing, and employment. A common question is how monthly utility bills factor into this assessment. Understanding this relationship is important for managing your financial profile.
How Utility Companies Interact with Credit Bureaus
Most utility providers, including those for electricity, gas, water, internet, and phone services, do not report positive, on-time payment histories to the three major credit bureaus: Experian, Equifax, and TransUnion. This is because utility services are not considered traditional forms of credit. Therefore, consistently paying these bills on time does not directly build a positive credit history.
However, utility accounts can impact credit if they become severely delinquent. If a bill remains unpaid for an extended period, the utility company may send the overdue account to a third-party collection agency. This collection agency, not the utility company, then reports the delinquent account to the credit bureaus, resulting in a negative mark on the consumer’s credit report.
While some exceptions exist, such as certain telecommunication providers participating in pilot programs, positive reporting is not standard for most traditional utility services. The primary impact remains the distinction between rare direct positive reporting and common indirect negative reporting through collections.
The Impact of Utility Information on Credit Scores
When a utility account is sent to collections and reported to credit bureaus, it can negatively impact a consumer’s credit score. A collection account is a derogatory mark that can lower credit scores. This negative entry remains on a credit report for up to seven years from the date of the original delinquency, even if the debt is eventually paid.
A collection account signals higher risk to lenders, making it challenging to obtain new credit, secure favorable interest rates on loans, or rent an apartment. Since positive utility payment history is not reported by companies, on-time payments do not build positive credit history or improve scores under traditional models.
While mainstream FICO and VantageScore models primarily consider traditional credit accounts, some newer scoring models incorporate alternative data, including utility payment history. However, the most substantial effect of utility accounts on credit scores remains the negative consequence of an unpaid bill being sent to collections.
Adding Utility Payments to Your Credit Report
Consumers can have positive utility payment history reflected on their credit reports through third-party services. These services act as intermediaries, allowing individuals to leverage consistent on-time utility payments to build or improve their credit profiles. Experian Boost is one widely recognized, free service.
Experian Boost allows consumers to connect online bank accounts to identify and verify on-time utility and telecom payments. Once verified, this positive payment history is added to the consumer’s Experian credit report and can impact FICO Scores. This service only reports positive payments, meaning late payments will not negatively affect the score.
Other services, such as eCredable Lift and IdentityIQ, also offer utility payment reporting, often extending to multiple bureaus like TransUnion. These platforms allow reporting of ongoing bills and sometimes up to 24 months of past payment history. While these services can help strengthen a credit profile, their impact may vary as not all lenders or credit scoring models fully incorporate this alternative data.