Although utility bills don't automatically count towards your credit score, late payments can impact your credit score. Utility providers can charge additional fees to keep collections accounts active in the case of nonpayment. They may also report your payment history on credit bureaus.
Utility companies issue credit checks
Utility companies issue credit checks on a monthly basis. Because they want to see if you can pay your bills on time, utility companies conduct credit checks every month. This is especially important to people just starting out in adulthood. They don't have a lot credit history, so they need to know if you will pay your bills. Although it can be difficult to improve your credit score this way, it is possible to get a good start by making sure you pay your bills on time every month. Utility companies report your payments each month to help you build credit history and improve your score.
While it's important to pay your bills on time, you should be aware that some utility companies may report your past due accounts to the credit bureaus. Additionally, interest may be charged if your credit cards have a current balance. If you have any doubts about whether or not your utility company is reporting your payments, contact the company and request a copy of your credit report.
They report payment history to credit bureaus
Canada's utility companies do not have to report your payment history. However, if your utility bill falls behind, the company has the option to send your account on to a collection agency. This will affect your credit score by as much as 50 points. This could cause you to have difficulty obtaining credit or housing.
Contact the utility company if you're not sure if the utility company reports the payment history to the credit agencies. But, most utility providers won't give credit bureaus their payment history. You will have to pay a fee if the utility providers do report.
They are part of rent payments
Utility bills are part of rent payments and can have an impact on your credit score. While most landlords and utilities companies don't report rent or utility payments to credit bureaus, it is possible to make these payments count towards your credit score. Paying your rent or utility bills on time is the most important thing. Not only will they help you establish a positive credit history, they will also boost your credit score.
A rental agreement should include a cap on the amount of your utility usage. A cap of $100 should be included if electricity is part of your rent. Your tenants may not pay rent if they use more electricity that this cap. Be sure to include seasonal variations in energy use into the cap.
They can be paid with a credit card
Understanding how utilities view credit history is important if you're concerned about your ability to pay your utility bills using a credit card. Many utilities require applicants who have bad credit to give a letter of support from someone else who will pay the bills. This letter is similar to a cosigner on a loan.
Paying your utility bills on time will prevent them from affecting your credit score. To avoid negative impacts, here are some ways to ensure that you pay your utility bills on time. Setting up automatic monthly payments is an excellent way to ensure you don't forget to pay your bills. If you're unable to pay your utility bills on time, you can search federal and state aid programs to find a solution.
They can bring in debt collection agencies
If your utility bills are past due, the company could contact debt collectors. Utility companies can report any delinquent accounts to the National Cable, Telecommunications and Utilities Exchange if you don't pay your bills on time. Although utility bills do not directly affect your credit score they can have an adverse effect on it.
They are notorious for intimidating and unethical ways of collecting debt. If you don’t want to deal directly with debt collectors, hang up. This will give you some time to think up a plan of action.