Did you know that not all of your bills affect your credit score? Lenders that view your credit score only see a small amount of the bills you pay. In reality, this means they don’t know if you pay bills, such as insurance or tuition on time. Of course, we don’t recommend not paying these items on time. But you can at least rest assured that they won’t affect your chances of getting a mortgage.
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There’s a benefit to pay your rent on time – you get to have a place to live. Don’t count on those timely payments helping your credit score, though. Even if they are reported to the bureaus,
FICO overlooks rent payments when determining your score. It may help just to have the housing history reporting, if your landlord is willing, but it won’t help or hurt your score in the long run.
If you are like most people, you pay car, auto, medical, and life insurance. If you have a home, you pay homeowner’s insurance too. These bills while costly and in some cases, required, are not reported to the credit bureau. That seems a little counterintuitive since many insurance companies use your score as a deciding factor in whether to insure you. It also plays a role in your premium amount.
Even though this bill isn’t reported to the credit bureaus, there are negative aspects of not paying them on time. Most alarming, the insurance company can just cancel your policy for non-payment. So while you might not worry about
your credit score, you should worry about your protection.
A majority of utility companies do not report your payments to the credit bureaus. There may be a few exceptions, though. It pays to ask your utility company if they do report. Of course, this is not because you want to make your payments late. It’s simply because it could help you if you make timely payments, especially if you don’t have a lot of existing trade lines.
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Cell Phone Bills
Many cell phone companies decide whether to give you a phone plan based on your credit score. However, they too do not report to the credit bureaus. The one area your cell phone bill could harm you, besides losing service, is if it goes to collections. Most collection agencies do report to the credit bureaus. This could be rather harmful to your credit score.
Cable and Internet Bills
Again, cable and internet companies may look at your credit score to see how you pay your bills, but they won’t return the favor. Your timely or late payments won’t help or hurt your credit score. Again, just like many other services, though, they don’t hesitate to send your account to a collection agency if you are late. This will hurt your score in the long run.
Court Ordered Family Support Payments
If you are ordered by the court to pay child support or alimony and you pay it on time, the credit bureaus won’t know about it. How they will know, however, is if you get behind on your payments. The court will usually send the account to a collection agency who will then report the negative activity to the credit bureaus. This will harm your credit score if it gets to this point.
No matter how high your medical bills get, no one will know about them unless you don’t pay them. At that point, they would end up with a collection agency. If you make a payment arrangement with the provider or you pay the bills outright, though, no one will be the wiser.
A majority of these bills are something you pay on a regular basis. Even though they may not negatively affect your credit score if you pay them late, there are still
negative consequences. As always, we recommend paying your bills on time. If you can’t, make sure you are upfront with the creditor. Let them know that you are behind and come up with a plan together to help you get current. This way you lessen the risk of losing the services and/or being sent to collections.
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