Do utility bills (like your energy bills) affect credit scores?

It would be nice if your regular payment of utility bills (like energy or water bills) would count towards your credit report and positively affect your credit score, right? Unfortunately, they generally have no impact. And worst of all, when they do it can be a negative one! But it’s not all bad news. When it comes to credit, we know the score.

First things first, let’s just clarify what we mean when we’re talking about utility bills. Traditionally, utility services are for the ongoing household bills, like gas, electricity, water and sewerage.

Some people also classify their telecoms in this too (landline and internet). And similarly, council tax, which although isn’t a utility bill, is considered an essential household bill. To make it easier, for this article we’ll use “utilities” as an umbrella term to discuss all of the above. For the purposes of this blog, “utilities” doesn’t cover mobile phone contracts, credit card bills or loan repayments, but we’ll touch on those too.

‍How does paying bills affect my credit score?

The most important thing to know about your bills is that if you fall behind on payments, it can damage your credit score.

It’s likely missed payments will find their way on to your credit report when the debt collection process starts, and once it’s on your credit file it can stay there for six years. It’s also important to know that the debt can lead to more serious defaults and county court judgments (CCJs). Speak to your provider if you’ve fallen behind with your bills, as they should have a team trained to help you and it’s a better solution long-term than not dealing with the debt.

‍Does paying bills build credit?

Typically, no. Because bills are not considered credit, simply paying them on time won’t increase your score. Your credit report may list the utility accounts you have (or had open in the past), but it depends on the provider and how they choose to report your bills to the credit reference agencies (CRAs), if at all. Not sure what we’re talking about when we mention the different CRAs (Equifax, Experian and TransUnion)? That’s okay! You can find out everything you need to know about them in this blog.

On top of that, not every utility provider is reporting to all three CRAs. For instance, your electricity may be reported to Equifax and Experian, but your water may only be reported to TransUnion. It’s best to ask your provider for a direct answer.

What is my credit score and how can I check it?

Your credit scores (plural - you actually have three – one with each of Equifax, Experian and TransUnion) are numerical summaries of your credit report. They let you know how creditworthy your credit report information looks to potential lenders (for when you apply for credit like loans, credit cards or mortgages). Generally, the higher your credit scores the better. You can read more about what a credit score is here.

If you’re not sure what your credit scores are, you can check it with each of the three main credit reference agencies (CRAs: Experian, Equifax and TransUnion) for free and without hurting your credit score using these services:

ClearScore (uses Equifax data)*
Experian App (uses Experian data)
Intuit Credit Karma (uses TransUnion data)

*Just for transparency, we work closely with ClearScore, so signing up using this link triggers a small commission for Loqbox.

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Do phone bills affect credit scores?

When you take out a mobile phone contract, you’re essentially creating a credit agreement to pay off the total amount (for the usage and/or the cost of the handset). If you pay it off in monthly instalments for a fixed amount of months, then it’s very likely this is being reported to at least one of the CRAs.

The same advice goes for missing payments as above here. But it’s more likely your monthly mobile phone bill is helping to positively build your credit history over time as you pay it off as promised, on time and in full each month. Find out more about how a phone contract could affect your credit score.

The same goes for any credit agreement like a credit card bill or regular loan repayment. This is why it can pay in the long-run to apply for small credit agreements even if you don’t necessarily need the loan — as long as you’re being sensible with your money

So, how can I build my credit score?

If you’re looking for a way to give your credit score a boost, what options do you have? Well, for a proven way to improve your credit score, you could get started with a Loqbox membership. ‍

With responsible use, we can help you boost your credit score by reporting your regular payments with us to Equifax, Experian and TransUnion.‍

Improvements to  credit score are not guaranteed.