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DO MY MONTHLY BILL PAYMENTS AFFECT MY CREDIT SCORE?

Q: Does making my monthly bill payments count toward my credit score? 

A: Unless you’re delinquent on monthly bills like utility payments, they will not affect your credit score. However, there is a way out. Here are four steps you can take to make on-time monthly payments and boost your credit score. credit-score-papers.jpg

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 monthly rent on time. They won’t accept this information from consumers, but you can use a rent-reporting service, like Rent Reporters, which will pass on this information to one, two or all of the three major credit bureaus each month, usually for a nominal fee. 

2. Sign up for Experian Boost

The Experian credit bureau recently started offering consumers the opportunity to have some of their utility bills reflected within their 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. Experian will then ask you to verify details and to confirm that you want this information included in your credit report. After your consent is received, your credit score boost will happen immediately. However, if you neglect to pay any reported bills for three consecutive months, the change in score will reverse itself. 

It’s also important to note that Experian Boost 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 reporting in the future. The credit-reporting service charges $2.99/month and can be helpful for those seeking to improve their score or build a credit history to qualify for a credit card or a loan. 

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

4. Go Off the Beaten Track 

If none of these options sounds attractive, consider going the unconventional route with an alternative score. Alternative scores, like the PRBC or the FICO XD Model, will include information like rent, insurance, phone and utility payments when calculating your credit score. Some alternative scores will integrate this data on their own, while others will allow you to self-report these payments, sometimes for a nominal fee. 

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

For the biggest impact on your score, pay all credit card bills on time, preferably in full. Don’t open any new cards, and keep your credit utilization low.