How to Add Utility Bills to Your Credit Report By Nick Gallo Your credit score is one of the primary factors determining your access to financial opportunities, and unfortunately, improving it takes considerable time and effort. However, adding utility bills to your credit report is one of the few legitimate shortcuts, and it’s becoming even more effective as the credit system evolves. Here’s what you should know about the tactic, including how it works and how much it helps your score. Can I Report Utility Bills to the Credit Bureaus? Utility providers typically don’t report your payment history to the credit bureaus unless they send you to collections for delinquency. After all, you’re technically paying them for a service, not making payments toward a credit arrangement. Unfortunately, you can't complete the credit reporting process by yourself either . The major credit bureaus only accept information from official data furnishers, and consumers don’t meet the requirements to become one. However, you can hire third-party service providers to report the information. These companies are qualified data furnishers that connect their software to your accounts and report your monthly bill payments to the credit bureaus. That way, you can add ongoing and sometimes even historical bill payments to your credit reports, which can help you demonstrate a positive payment history even if you've never had any credit accounts. Typically, you’ll have to pay an upfront charge to initiate the service and make a recurring monthly payment for as long as you want to maintain it. Of course, the prices and service details vary significantly between providers. With eCredable Lift , you can report your accounts from over 2,000 utility companies for just $24.95 per year! That includes your ongoing payments plus up to 24 months of historical payments. If you want to improve your credit score, it’s an effective and affordable way to get a quick boost. What Bills Can I Add to My Credit Report? Data furnishers can help you report many different types of utility expenses. If you’re paying a bill each month, you can probably find a business willing to report it to the credit bureaus. However, reporting multiple bills can quickly get expensive if you have to subscribe to a different service for each one. Instead, your best option is typically to choose a data furnisher that can report multiple expenses. For example, eCredable Lift lets you report up to nine bill types. That includes power, water, gas, waste, mobile phones, landline phones, cable TV, satellite TV, and internet. As a result, you can report almost all of your utilities with a single subscription of just $2 per month. That’s less than the price of a cup of coffee, which makes this one of the best credit-building options if you’re struggling to keep up with debt payments. Another advantage that eCredable Lift has - you can pay your bills any way you like. From your bank account, a credit card, debit card, a bodega, or even walkup bill pay at the utility company. The account must be in your name, so you may find it hard to get credit for your cell phone payments if you’re on your family’s plan, even if you reimburse them for your portion. Also Read: Does Paying Utilities Build Credit? How Much Can I Raise My Credit Score by Reporting Utilities? Reporting your utility bills to each major credit bureau can significantly increase your credit score . However, your results will vary depending on your current creditworthiness. Generally, consumers with thin credit files tend to see the most improvement in their credit scores after reporting utility payments. That refers to people with less than five credit accounts in their credit reports, including those without a credit history. Conversely, a consumer with a good credit score and well-established credit history would probably benefit less from reporting utilities. Adding timely bill payments should still be beneficial but may provide a less substantial point increase. In addition to your credit file details, the number of utility accounts you report to the bureaus will also impact your results when building credit. As you might expect, you’re likely to gain more points with the more utilities you add. We’ve calculated some examples using a VantageScore simulator to give you a better idea of the results you can expect. First, we ran the numbers for a consumer who’s never had a credit account before and has no credit score. Assuming each reported utility account contained 12 months of timely payment history, here’s how much of an increase you’d receive per account in that scenario: ♦ One utility account: Increase score from 0 to 669 ♦ Two utility accounts: Increase score from 0 to 679 ♦ Three utility accounts: Increase score from 0 to 736 Next, we ran projections for a consumer who’s exceeded the limit on their nine-month-old credit card and recently missed a payment on their auto loan, leading to a VantageScore of 491. Here’s how much your score would benefit per utility account with 12 months of timely payment history in that scenario: ♦ One utility account: Increase score from 491 to 534 (+43 points) ♦ Two utility accounts: Increase score from 491 to 539 (+48 points) ♦ Three utility accounts: Increase score from 491 to 540 (+49 points) These scenarios are helpful reference points, but there’s ultimately no way to know how much utilities will boost your credit rating. Consumers with identical scores can see different results from reporting their payments since everyone’s credit profile is unique. If you haven’t yet, consider getting the free credit report you’re guaranteed by the Fair Credit Reporting Act. That can help you find the best way to improve your score. For example, you can use it to find your balance and credit limit for each credit card issuer and calculate your credit utilization, which should be no more than 30%. Mortgage Lenders in the Future Mortgage lenders have historically used FICO scores in their underwriting, especially FICO Scores 2, 4, and 5. Unfortunately, the algorithms behind these credit scores don’t utilize alternative credit data, which includes utility bill payments. However, FICO’s monopoly on the mortgage lending market is ending. In October 2022, the Federal Housing Finance Agency (FHFA) announced its approval of the FICO Score 10T and VantageScore 4.0 credit models for use by Fannie Mae and Freddie Mac. In other words, the FHFA will soon require lenders to check your FICO Score 10T and VantageScore 4.0 when they underwrite your application for a conforming home loan, the most common type of mortgage. Fortunately, both these credit scoring models include alternative credit data in their calculations. That means sharing your utility payments with a credit reporting agency is becoming even more beneficial. Of course, it will take time for lenders to switch to the latest credit score models, but you can expect them to transition over the next few years. How Do Late Utility Bill Payments Affect Your Credit? Payment history is the most impactful factor in the FICO and VantageScore algorithms. As a result, making payments late is one of the worst things you can do to your credit score, with even one late payment causing significant damage. However, your utility bill is considered a source of alternative credit data, not a traditional credit account. As a result, paying it late affects your credit score differently than missing a payment on your credit card debt or installment loan. If you’re not reporting your utility payments through a credit building service like eCredable Lift, paying them late generally won’t affect your credit score. The only exception is when you’re so delinquent that they send you to collections. That typically doesn’t happen until your debt is past due by at least three to six months. Unfortunately, if your account goes to collections, you can expect a significant decrease in your credit score. In addition, the entry will stay on your credit report for seven years. Meanwhile, if you are reporting your utilities through a third-party data furnisher, the effect of paying bills late depends on your service provider’s policy. For example, eCredable does report late payments eventually, but not until you’ve been past due for at least 30 days. How eCredable Can Help You Build Credit The eCredable Lift program is one of the best ways to build credit with alternative data. You can use it to report unlimited accounts with over 2,000 utility companies across nine types of expenses for only $24.95 per year, which is just over $2 per month. Not only does that make the reporting service much more affordable than a credit builder loan or secured credit card, but there’s also no credit check upon signing up. As a result, you can always use the service to improve your creditworthiness, even if you have a bad credit score or limited credit history. In addition, you’ll get a free copy of your VantageScore 3.0 each month. This is a very popular scoring algorithm currently using alternative credit data, which will let you track your progress. To unlock even more powerful benefits, you can upgrade to the eCredable LiftLocker program for just $9.95 per month. You’ll receive credit monitoring, a credit score simulator, and several financial management tools in one convenient mobile app. Whichever plan you choose, you can cancel at any time without penalty, so there’s no risk in giving it a try. If your credit score could use a boost, find out if eCredable can connect to your utility company today!