Reporting late utility payments is entirely at the discretion of the utility company you use. You can't typically see your good payment history with a utility company on your credit report, but depending upon the stage of your delinquency, the utility company might refer your past due amount to a collection agency. If that happens, the collection agency reports to the credit bureaus, which causes your credit rating to suffer.
The Fair Credit Reporting Act -- a law that must be followed by all companies that report to the credit bureaus -- does not require utility companies to report delinquent accounts. A utility company can choose not to report your late payments and may do so because the Fair Credit Reporting Act requires the reporting company to follow a set of guidelines that include responding to any challenges to the reported information within a certain period and maintaining accuracy of the information reported to your credit file.
Instead of reporting your late payment to the credit bureaus, the utility company will probably roll it over, and you will be responsible for the previous month's payment, as well as the following month's payment plus any late charges. A utility company could also disconnect your service if you don't pay your bill, causing you a more immediate inconvenience than reporting your late payment to credit agency would cause.
Sending your delinquent account to collections is usually a last resort for utility companies. A collection account reports to the credit bureaus, which can have a major effect on your ability to get future credit accounts with any credit provider, not just other utility companies. Many companies wait for up to six months of nonpayment before sending your account to collections.
The information reported to your credit file by utility companies depends on the state where you live. It might be best to ask the utility company about what information is reported, when it's reported, how much late fees are and how long before your services are disconnected. Many utility companies are lenient because their services are essential, and they will work with you around your paydays and payment amounts to avoid a delinquent account.
- NEDAP: What Information Is Not in My Credit Report?
- myFICO: Can Accounts That Aren't on My Credit Report Affect My Score?
- Experian: Not Paying Utility Bills and Insurance Could Hurt Credit Scores
- MintLife: Why Utility Companies Don’t Report to Credit Agencies
- NVEnergy: What If My Payment Is Late?
- Credit Karma: How Debts in Collections Affect Your Credit
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