Utility bills let you build a long credit history and improve your credit score. They can also help reduce the risk of identity theft if you pay them with paper checks rather than plastic. Plus, utility bills are usually more stable than other types of debt like student loans or car payments; so, they’re typically less risky to be carrying on your balance sheet.
Are Utility Bills Reported to Credit Bureaus?
Utility bills are not reported to credit bureaus. But they do affect your credit score because they’re a factor in calculating your debt-to-income ratio which is used to determine what kind of interest rate you will pay on loans such as mortgages and car loans. The higher the ratio, the worse off you’ll be when it comes time to borrow money for something like a house or a new car.
How Can Utility Bills Help My Credit?
Utility bills are not the most exciting topic. There’s no way to make them sound interesting, but they’re important for your credit score. By paying utility bills on time and in full each month, you can improve your credit score by as much as 10%. It’s also a good idea to use less electricity during peak hours so that you can save money every month on your electric bill.
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