Rent and certain other tradelines can appear on your credit reports if your landlord or the service provider reports your payments to credit bureaus. This reporting is not mandatory, but some financial apps can help you report rental payments and other bills to credit bureaus, which can help you build credit if you make timely payments.
You may think paying your rent and utilities on time each month will help build your credit. Unfortunately, this isn’t typically the case. The reality is that most landlords and utility companies don’t regularly report payments to the major credit reporting agencies.
This article explains alternative options to add utilities to a credit report, what tradelines are, how they work and what steps you can take to make sure your regular rent and utility payments are helping build your credit.
How Tradelines Work
A tradeline is a term credit reporting agencies use to identify each credit account listed on your credit report. Each separate account is listed as a different tradeline. Information from each tradeline, such as payment history and available credit, is used to calculate your credit score.
Creditors, such as credit card companies, utility providers, and landlords, aren’t required to report your payments to any of the major credit reporting agencies. In fact, many utility providers, small business lenders, and landlords may not report these payments because they’re required to pay a fee to do so.
However, if you’re late making these payments, some companies and landlords will report these late payments. If your utility or rent debt is transferred to a collection agency, it’s likely to be reported on your credit report.
How Do Rent and Utilities Increase Credit Score?
There are several ways rent and utility payments can help increase your credit score. First, if you currently have little to no credit history, adding new tradelines can help. The length of time you’ve held various credit accounts also plays a role in calculating your credit score. The sooner you start adding these payments to your credit report, the better.
Secondly, a consistent history of making on-time payments can also help boost your credit. Your payment history accounts for up to 35% of your overall credit score. Taking steps to add rent and utility payments to your credit account can increase the number of on-time payments on your credit report.
This combination can help you start building your credit, and over time, it may even help boost your credit score.
Can I Report Utility Bills to Credit Bureaus?
While you can’t report your utility bills and rent payments directly to the credit bureaus, there are alternative options. To add bills to credit report results, you can use a service provider to report these payments for you or use a credit card to pay these bills. These services can be ideal for those with thin credit files.
What Bills Help Build Credit?
Trying to build a solid credit history? While traditional credit scores primarily focus on loans and credit cards, there are ways to get credit for other regular payments.
Here's a breakdown of utility and other bills that may be eligible for reporting:
- Water bill
- Phone bill
- Internet bill
- Cable/satellite bill
- Gas and electricity bills
- Video streaming services
- Trash, garbage, sewer, and recycling services
Benefits of Adding Utility Bills to Credit Report
Reporting on-time utility payments helps you build a positive history of alternative credit data, which can be beneficial in several ways:
- Prompt reporting
- Improved credit score
- Access to more credit
- Potentially lower interest rates
- Helps compile a comprehensive and transparent credit history
Just by adding utility bills to your credit report, you can turn everyday expenses and obligations into opportunities to strengthen your credit profile. This simple step can significantly improve your financial health and open doors to better borrowing opportunities.
Talk to Your Landlord to Add Rent Payments to Your Credit Report
Wondering how to get tradelines for free? Try talking to your landlord. If your landlord doesn’t currently report your rent payments to the credit bureaus, it never hurts to talk to them. Your landlord may not understand the impact not reporting these payments has on your credit score. In fact, some landlords may not even know that reporting these payments is an option.
If your landlord still doesn’t want to report your rent payments, see if they’ll set up a profile with the various credit bureaus. This process can make it easier for you to report your rent payments through a reporting service company.
How to Choose a Reporting Services
There are several factors you should consider when choosing a reporting service company, such as:
- What payments will be reported to the credit bureaus?
- What credit bureaus does it report payments to?
- What are the setup and monthly fees?
- How long will it take for payments to appear on your credit report?
- Does the service offer access to your credit score?
- Are there any enrollment requirements?
- How does the company secure your personal data?
- How easy is it to cancel your services?
Comparing the answers to these questions can help you determine which credit reporting service company can best help you reach your financial goals.
Alternatives to Reporting Rent and Utilities
Other options are available to make sure you get credit for paying your rent and utility bills on time. Below is a look at some of these alternatives.
Credit Cards
If you have a credit card, you can use it to pay your monthly household bills, such as utilities, phone, video streaming, and rent payments.
Because most credit card companies do report payments to the credit bureaus, you’ll receive credit every month you pay your credit card bill on time. If you’re not eligible for a traditional credit card, consider obtaining a secured credit card until you build up your credit.
Credit Builder Loans
Credit builder loans can also help you build your credit. Unlike traditional loans, you don’t receive your funds until you make all your payments. The good news is that these payments are typically reported to the various credit bureaus. Once you reach your credit amount, which is usually less than $1,000, you can use these funds to pay your household bills.
Authorized User Status
If you’re unable to secure your own credit card, you may have a friend or family member willing to add you as an authorized user. This step gives you the ability to use this card to make some of your monthly payments, such as rent or utility bills. If the cardholder makes on-time credit card payments, it can help build a new tradeline on your credit report and boost your payment history.
Next Steps
Building your credit score takes time and commitment. Here’s a look at recommended further reading that can help you with this process.
Make the most of every payment you make. To see how adding utilities to a credit report can help, reach out for a free credit report card.
How to Add Utilities to Credit Report FAQs
Navigating credit reports and utility bills can be tricky. Here are answers to some frequently asked questions to help you understand how utilities interact with your credit.
How Long Does a Utility Bill Stay on Your Credit Report?
Generally, utility companies don’t report positive payment history to the major credit bureaus (Equifax, Experian, TransUnion). This means on-time utility payments typically won’t appear on your standard credit report.
However, if you default on a utility bill and it gets sent to collections, that mark can remain on your credit report for up to seven years.
Does Paying Your Electric Bill Help Your Credit?
Simply paying your electric bill on time does not improve your credit score, since most utility companies do not regularly report positive payment history to the major credit bureaus.
However, consistently paying your electric bill on time can prevent negative actions such as the account going to collections, which would negatively impact your credit.
Some credit scoring models, like Experian® Boost or UltraFICO®, can potentially incorporate utility payment history to improve your credit score. That said, these models require you to opt in and link your bank accounts for verification.
Does Paying WiFi Build Credit?
No, paying your WiFi bill directly doesn’t usually build credit. Similar to other utility bills, most internet service providers do not report on-time payments to the major credit bureaus. However, late or unpaid bills that are sent to collections can negatively affect your credit report for up to seven years.
