Do Utility Bills Affect Your Credit Score?
The optimist appreciates the fact that your bank account balance at the end of each month is a positive number instead of a negative one, but in some cases all you have to show for your hard work and disciplined spending habits is the motivation to work just as hard next month as you did this month. If you are doing such a good job of paying your bills on time, why isn’t your credit score improving? As grateful as you may feel for being able to afford your bills and rent, it is frustrating that you keep getting turned down for credit cards and car loans, or that, when you do get approved, you choose not to borrow the money because the monthly payments would be unaffordable and will mess up the budget you have worked so hard to maintain. If you are stuck in the same cycle of not being able to afford car loans, home mortgages, or other types of credit, despite putting all your income toward your financial obligations, contact a Philadelphia debt collection abuse lawyer.
Utility Companies Usually Do Not Report Your Credit History to Credit Bureaus
The three major credit reporting bureaus are Experian, TransUnion, and Equifax; these entities keep track of your credit score and provide credit reports to prospective lenders and landlords to let them know how much of a risk they are taking by lending money or renting real estate property to you. Your credit score is always changing. As you make payments on car loans, credit cards, and the like, your credit score increases. Every time you miss a payment, your credit score gets lower, especially if the creditor sells your debt to a collection agency. Bankruptcy filings also lower your credit score.
Utility bills, such as electricity, water, phone, and Internet, usually do not affect your credit score one way or the other. This is because utility companies do not report your timely payments to credit reporting agencies. They also do not report missed payments, at least not until your account becomes so delinquent that it goes to collections. This means that, when you are breaking even on your bills, your credit score does not change much.
Use Experian Boost at Your Own Risk
Experian offers a service called Experian Boost that enables you to improve your credit score by paying your utility bills on time. Of course, hardly anything in life is free, and this applies to Experian Boost, too. By enrolling in Experian Boost, you enable Experian to see all the transactions in your bank account and count them toward your credit score. Most people do not want to share that many of their financial details. There are other ways to improve your credit score when you are on a tight budget, such as secured credit cards and low interest personal loans in small amounts. In other words, borrow small amounts of money that you can pay back in installments without letting Big Data pry into your business.
Contact Louis S. Schwartz About Building Your Credit
A Philadelphia consumer law attorney can help you qualify for credit without selling your soul to the credit reporting bureaus. Contact Louis S. Schwartz at CONSUMERLAWPA.com to set up a free, confidential consultation.