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You may not like the answer.
Key Point
- It’s always a good idea to keep up with bills.
- Certain bills (mortgages, car loans, credit cards) count toward your credit score, but utility bills generally don’t.
Your credit score is an important number. In other words, it tells us how much risk the borrower is taking when lending money or extending credit. A high credit score sends a message that you can be trusted with a line of credit or a loan. As a result, credit card companies and lenders may reward you with lower interest rates on the amount you owe.
On the other hand, a low credit score indicates to lenders that you are riskier. Or you may be denied the option to borrow outright.
There are many factors in calculating your credit score today. But the most important factor is your payment history. If you have a history of paying your bills on time, your lender will have more confidence in your chances of repaying your loan.
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However, not all bill payments are reported to the credit bureaus that determine your credit score. Making your utility bills on time is a good idea, but doing so won’t necessarily improve your credit score.
Utility bills are generally not counted
Utility bills are something that many people pay monthly, so I think they count in the context of your credit score. In practice, however, most utility companies do not report payment information to credit bureaus. So even if you manage to pay your electricity and utility bills on time each month, it may not affect your credit score much.
Of course, it makes sense to pay those bills on time, even if it doesn’t help improve your credit score.if you very Late payment of utility bills can, in extreme circumstances, risk service outages.
bill conduct counts towards your credit score
Utility bills aren’t usually factored into your credit score, but installment loan payments and credit card payments are. Let’s say you borrow money with a mortgage. Getting your work done on time every month can improve your credit score or keep an already solid credit score in good shape. Similarly, timely car and personal loan payments can help boost your credit score.
Paying your credit card bills on time can also help your score. It will be counted as having made a payment.
Of course, it’s not a good idea to only make minimum credit card payments each month, as interest accrues on any balances you carry forward. In fact, having a credit card balance that is too high for your total spending can lower your credit score. This factor is less important than payment history when calculating your credit score. But it’s also something you don’t want to overlook.
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