While utility bills do not automatically factor into your credit score, if you're delinquent on your payments, this can have a negative impact on your credit score. Utility providers can charge additional fees to keep collections accounts active in the case of nonpayment. In addition, they report your payment history to the credit bureaus.
Utility companies can issue credit checks
Utility companies conduct credit checks monthly. This is necessary because they need to verify that you will pay your monthly payments. This is particularly important for those just starting out in adulthood, who don't have a lot of credit history and have low credit scores. While it is not easy to increase your score in this way, you can still get a good start by paying your bills on time each month. Utility companies also report your payments every month, so you can build your credit history and score in the process.
It's important to pay bills on time. However utility companies may report past due accounts. In addition, some will charge you interest if you have a balance on your credit card. If you have doubts as to whether your utility company has reported your payments, contact them to request a copy.
They provide payment history information to credit bureaus
Canada's utility providers are not required to report information about your payments to credit bureaus. If you fall behind with your utility bill payments, the company is allowed to send the account to a collection agent. This could affect your credit score up to 50 points. As a result, you may have trouble obtaining credit or housing.
Contact your utility company to find out if they report your payment history. However, the majority of utility providers do not want to report to credit bureaus. You will have to pay a fee if the utility providers do report.
They are included with rent payments
Utility bills can be included in rent payments. This can affect your credit score in several ways. Although most landlords and utility companies do not report rent and utility payments to the credit bureaus, you can make your payments count toward your credit score. Paying your rent or utility bills on time is the most important thing. These will help you build positive credit histories and increase your credit score.
It is also important to ensure that your rental agreement contains a limit on your utility use. For example, if your rent includes electricity, you should include a cap of $100. Your tenants may not pay rent if they use more electricity that this cap. Make sure the cap accounts for seasonal variations in energy consumption.
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. Some utilities require applicants with poor credit to present a letter guarantee from someone who will pay the bill if the applicant is unable. This letter is similar to a cosigner on a loan.
Your credit score will not be affected if you pay your utility bills on-time. To avoid negative impacts, here are some ways to ensure that you pay your utility bills on time. For example, setting up automatic monthly payments is a great way to avoid forgetting to pay your bills. You can also search for federal and state assistance programs if you are not able to pay your utilities on schedule.
They can bring in debt collectors
You could be sued by the utility companies if your utility bills are not paid on time. If your utility bills are late, utility companies may report the delinquent accounts, often to the National Cable, Telecommunications and Utilities Exchange. Utility bills have no direct impact on credit scores, but they can affect it in a negative way.
They are notorious for intimidating and unethical ways of collecting debt. If you don't want to deal with debt collectors, simply hang up when they call. This will give you some time to think up a plan of action.