You May Not Get Full Credit for Being Responsible
You pay your rent and utilities on time every month. That shows you’re responsible with your money so you ought to see the benefits on your credit report, right? Unfortunately, you typically won’t. That’s because, again, credit reports distinguish between financial commitments and money borrowed. Generally, your credit report will not show payments toward your:
- Homeowners association dues.
- Utility bills.
- Cell phone bill.
- Cable or streaming service bills.
- Insurance premiums.
Unfortunately, if you fall behind on payments for any of the above, that bad news might show up on your credit report. That’s because collection agencies are members of the credit reporting bureaus and report to the bureaus on the accounts they handle.
There are some ways, though, to get your responsible payment history on these items reported for your benefit. Assuming that your landlord cooperates by verifying your rent, rent-reporting services can arrange to have your rent payments reported to the credit agencies. Some such services are free, while others charge more than $100 a year, so it’s a good idea to do a bit of research before choosing one. In addition, Experian Boost is an opt-in program that grants Experian access to your bank account so that your utility and cell phone payments can be included in your credit report.1 It’s a proprietary program, so even if you opt in to use it, those payments will not show on your Equifax or TransUnion credit reports.
A final point on the tradelines: Because the report is intended to guide lenders, it focuses on money you owe lenders. Other money that you owe typically does not get reported. For example, a loan from your 401(k) – money that, in effect, you borrow from yourself – will not show up. And medical debt will not be reported either, unless it is assigned to a collection agency.