Does it Help Your Credit Score to Have Utility Bills in Your Name?

You might see your credit score as a mysterious force. In reality, it's just a reflection of your credit report. Maintain your credit accounts and a solid payment history and your credit score reflects it with a positive score. Having utilities in your name could help your score if you pay on time each month, but only if the utility companies report to the credit bureaus.

You actually have three credit reports and scores. They come from Experian, TransUnion and Equifax, the major credit reporting agencies, which keep a file on your payment history. Your credit score represents the information in each report. Because they contain different information, there's usually a variance in your scores. However, reporting to the agencies is entirely voluntary for utility companies and some of them don't.

The biggest reason rests on the company's bottom line. Reporting to the agencies costs money. Utility companies have to pay to insert information on your credit report and doing so doesn’t benefit them. There's not much incentive for them to shell out money on your credit score. In addition, reporting comes with some strict federal reporting regulations under the Fair Credit Reporting Act.

It never hurts to ask if your utility would consider reporting your payment history. Some utility companies will do a one-time credit report at your request. However, this varies widely depending on the company and their policies. Most importantly, don't expect it to become a monthly thing. You might only get the account to be reported once.

Keep in mind that utilities can also hurt your credit score. Many utility companies pull your credit report when you sign up to decide whether to charge a deposit. That inquiry can drop your credit score up to five points. Default on the account and it's turned over to a third party for collections and possible legal action. The collections account really drops your score and stays on your report for seven years. If the account goes to court, you face garnishment and a public entry on your credit report.