If you research credit-building strategies, you’re sure to come across advice recommending that you work to add positive accounts to your credit reports. And while new credit cards, loans, and other types of accounts certainly won’t erase negative items from your reports, those positive tradelines could improve your credit scores over time.
As you try to figure out how to get more positive history on your credit reports, you may wonder if there’s a way to get credit for the bills you’ve already been paying on time, like your rent and utilities. They are both, in fact, forms of credit, albeit not in plastic form. The good news is that in some situations, your rent and utility payments might be able to impact your credit scores if you’re able to get them on your credit reports.
But setting yourself up to get any potential benefit out of these types of accounts requires some legwork on your end. Here’s what you need to know about the process.
Most landlords and utility providers don’t report account activity to the Big-3 credit reporting agencies, Equifax, Experian and Trans Union. As a result, you probably won’t see rent or utility accounts on your credit reports, at least not unless you fail to pay your bills and the accounts end up with a collection agency.
If you want to benefit from positive rent and utility payments, you’ll need to find a way to get those tradelines onto your credit report. Unfortunately, you can’t ask the credit bureaus to add items to your credit report as a consumer. That’s just not how credit reporting works. But, over time a few options have become available that might be able to help.
Experian Boost: Experian, one of the three major credit bureaus, offers a free service to consumers called Experian Boost™. When you sign up for the service, you give Experian permission to search your bank accounts for positive payment history on mobile phones, utility accounts, and certain subscription services. If they find those types of accounts, Experian will add them to your credit report. Boost is limited to Experian, so it won’t do anything to help your credit scores based on your Equifax or Trans Union reports.
eCredable Lift®: If you want to add utility bills to your Trans Union credit report, you might want to consider eCredable Lift. The service is provided by a third party, not the credit bureau itself. And there’s also a fee of $9.95 per month to $24.95 per year. Unlike Experian Boost, eCredable Lift can result in the reporting of up to eight utility style accounts, with both positive and negative payment history, to Trans Union. So, if you use the service to add an account with late payments to your Trans Union credit report, you might experience a decrease in your credit scores rather than the increase you were probably hoping to see. But, you get to choose what accounts to add so you should be able to control for this issue.
Rent Reporting Services: There are several third-party services you or your landlord may be able to use to report rent payments to one or more of the major credit bureaus. Experian RentBureau, Rental Kharma, and RentTrack are a few examples. Most of these services charge a fee, but the cost might be worth it if it has the potential to help you establish positive credit history and, thus, positive credit scores.
Once your rent payments or utility bills appear on your credit reports, those items have the potential to influence your credit scores. But it’s important to understand that only some credit scoring models and generations will consider rent or utility data.
Take rent reporting, for example. FICO® Score 8 doesn’t factor rental payment data into its credit score calculations. Newer FICO Scores (FICO® Score 9, FICO® Score 10, etc.) and VantageScore credit scores do take rent payments into consideration. So, the answer about whether or not rent and utilities will impact your scores depends on the score brand and the score generation.
Regardless, having more good stuff on a credit report is always better than having less good stuff on a credit report. For consumers who have thin or limited credit histories, there’s nothing wrong with using a service to add positive utility or rent payment history to your credit reports, just as long as you don’t forgo also establishing using traditional methods like with banks and credit card issuers.