What Bills Help Build Credit? | Capital One (2024)

December 19, 2023 |4 min read

    You may know that credit scores are based largely on how you’ve handled things like loans and credit cards. But according to the Consumer Financial Protection Bureau (CFPB), paying your utilities, rent and cell phone bills could also be a factor.

    When it comes to credit scoring, those types of payments provide what’s known as alternative data. If alternative data is reported to credit bureaus, paying bills on time can help build credit. Keep reading to learn how.

    Key takeaways

    • Paying utilities, rent and cell phone bills can help build credit if they’re reported to the credit bureaus.
    • If certain bills aren’t reported to the credit bureaus, you can consider using a third-party service to report your payments.
    • Payments for mortgage, credit card and installment loan bills could also help build credit, if they’re made on time and reported to the credit bureaus.

    Does paying phone, rent and utility bills help build credit?

    If you keep up with your utility, rent and phone bills and that activity is reported to credit bureaus, it could help boost your credit. That’s because your payment history is an important factor when it comes to your credit scores.

    Remember, whether it’s a credit card bill or a phone bill, it’s important to stay current with what you owe. Late, missed or delinquent payments can negatively impact credit scores and creditworthiness.

    How do utility, rent and phone bill payments appear on my credit reports?

    Alternative data isn’t as common as traditional factors used to judge credit. But if it’s reported, it’ll appear on your credit reports as something called a tradeline. Tradelines include account information like payment history, account status, account activity and account history.

    What if my utility, rent and phone bill payments aren’t reported to the credit bureaus?

    You might be able to use a service to report payments to credit bureaus. Some things to keep in mind:

    • Reporting services may charge a fee.
    • They may not report to all three major credit bureaus: Equifax®, Experian® and TransUnion®.
    • Once the bill payments are included in your credit reports, they’ll help you build credit only if you pay them on time each month.

    How do cell phone, rent and utility bill payments affect credit scores?

    Assuming cell phone, rent and utility payments are reported to credit bureaus, that information could affect credit scores in various ways. The CFPB says credit scores are typically based on factors like payment history, number and types of balances, credit use and the age of credit accounts.

    It even depends on which credit-scoring company calculated the score and which formula, called a credit model, they used to do it. Only some scoring models take alternative data into account. VantageScore, for example, incorporates alternative data like utility payments and rent into its VantageScore 3.0 and VantageScore 4.0 models. More recent FICO® scoring models, such as FICO 9, do too. But FICO’s most popular model, FICO 8, doesn’t.

    Can late phone, rent and utility bill payments affect credit?

    It’s possible that getting behind on payments can lower credit scores even if the bills aren’t being reported regularly.

    Depending on how far behind payments get, the account could be turned over to a collections agency. The debt collector could make a negative report to the credit bureaus. Collections activity can stay on a credit report for seven years and sometimes longer, according to the CFPB.

    You can learn more about how debt collections work from the CFPB.

    What other types of bills can you pay to build your credit?

    Some other monthly bills that, if paid on time and reported to the credit bureaus, could help you build credit include:

    • Credit card payments, including secured credit cards and student credit cards
    • Installment loans like student loans and auto loans
    • Mortgages
    • Credit-builder loans

    What bills help build credit in a nutshell

    Paying cell phone, rent and utility bills can help you build credit if your on-time payments are reported to the credit bureaus. But even if they’re not directly impacting your credit, it’s a good idea to pay all your bills on time if you can. It’s a key part of financial responsibility, and it might help you avoid late fees or penalties and loss of service.

    To make sure your credit scores are moving in the right direction, you can get a free copy of your credit report from each of the three major credit bureaus. Visit AnnualCreditReport.com to learn how.

    Another way to monitor your credit is by using CreditWise from Capital One. With CreditWise, you can access your TransUnion credit report and VantageScore 3.0 credit score without hurting your credit. CreditWise is free for everyone, even if you’re not a Capital One customer.

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    What Bills Help Build Credit? | Capital One (2024)


    What Bills Help Build Credit? | Capital One? ›

    To build credit, it's important to practice good financial habits and monitor your credit routinely. One way to build credit is by applying for and responsibly using a credit card. In some cases, paying other bills, like rent or utilities, can help boost your credit scores.

    What bills boost your credit score? ›

    Payments for mortgage, credit card and installment loan bills could also help build credit, if they're made on time and reported to the credit bureaus.

    What payments help build credit? ›

    If you want to build credit without a credit card, you might try a credit-builder loan, secured loan or co-signed loan. There are also ways to use rent, phone and utility payments to build credit. Some of these ways are free, others carry a fee.

    How to get a 720 credit score in 6 months? ›

    To improve your credit score to 720 in six months, follow these steps:
    1. Review your credit report to dispute errors and identify areas for improvement.
    2. Make all payments on time and avoid applying for new credit.
    3. Lower your utilization ratio by paying down balances, increasing credit limits, or consolidating your debt.
    Jan 18, 2024

    How do I add utility bills to my credit report? ›

    Utility companies typically don't report your payment history to the credit bureaus. But paying utility bills on time can help your credit score when you use Experian Boost. This tool specifically integrates gas, electric, water and other utility payments into your Experian credit report and scores.

    What bills do not affect credit score? ›

    Common monthly bills that have no direct impact on your credit score: Utilities (gas, water, and electric service) Insurance payments (auto, renter and homeowner insurance, etc.) Bills from medical providers.

    How long does it take to build credit from 500 to 700? ›

    The time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.

    How can I raise my credit score 100 points overnight? ›

    10 Ways to Boost Your Credit Score
    1. Review Your Credit Report. ...
    2. Pay Your Bills on Time. ...
    3. Ask for Late Payment Forgiveness. ...
    4. Keep Credit Card Balances Low. ...
    5. Keep Old Credit Cards Active. ...
    6. Become an Authorized User. ...
    7. Consider a Credit Builder Loan. ...
    8. Take Out a Secured Credit Card.

    What's the highest credit limit you can get with Capital One? ›

    Capital One Venture Rewards Credit Card

    Highest reported credit limit: $58,000, according to a member on the myFICO forums. Sign-up bonus: Earn 75,000 bonus miles when you spend $4,000 on purchases in the first three months from account opening.

    Do cell phone bills build credit? ›

    Phone bills for service and usage are not usually reported to major credit bureaus, so you won't build credit when paying these month to month. However, through certain credit monitoring services, you can manually add up to 24 months of payment history to your report.

    Does utility bills help credit? ›

    The Takeaway. With rent, phone bills, electric bills, and other utilities, on-time payments or one late payment won't make any difference to your credit score, because they're not considered credit accounts by the three major credit bureaus.

    What purchases build credit the fastest? ›

    Minor Purchases to Build Credit
    • Groceries. Groceries are one of the biggest monthly expenses for many families and households, so it can make sense to put your grocery purchases on your credit card. ...
    • Gas. Gas is another large expense for many people. ...
    • Utilities. ...
    • Coffee. ...
    • Streaming Subscriptions. ...
    • Gym Membership. ...
    • Entertainment. ...
    • Car.
    Feb 15, 2023

    Is 650 a good credit score? ›

    As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.

    How rare is a 720 credit score? ›

    Who Has a 720 Credit Score?
    Credit ScoreTierPercentage of Americans
    720 – 850Excellent38.12%
    660 – 719Good17.33%
    620 – 659Fair/Limited13.47%
    300 – 619Bad31.08%

    How big of a loan can I get with a 720 credit score? ›

    You can borrow $50,000 - $100,000+ with a 720 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

    What brings your credit score up the fastest? ›

    4 tips to boost your credit score fast
    • Pay down your revolving credit balances. If you have the funds to pay more than your minimum payment each month, you should do so. ...
    • Increase your credit limit. ...
    • Check your credit report for errors. ...
    • Ask to have negative entries that are paid off removed from your credit report.

    Does your credit score go up when you pay bills? ›

    Paying noncredit bills like rent, utilities, and medical expenses on time won't bump up your credit score because they're usually not reported to credit bureaus. But if they're very late or in collections, they'll likely get reported and affect credit scores negatively.

    What bills qualify for Experian Boost? ›

    Which bill types qualify?
    • Mobile and landline phone.
    • Rent payments.
    • Utility, including electricity, gas, water and waste management.
    • Telecom, including satellite, cable and television.
    • Insurance.
    • Internet.
    • Video streaming services.

    What is #1 factor in improving your credit score? ›

    1. Payment History: 35% Making debt payments on time every month benefits your credit scores more than any other single factor—and just one payment made 30 days late can do significant harm to your scores. An account sent to collections, a foreclosure or a bankruptcy can have even deeper, longer-lasting consequences.


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