How to Use Your Cable Bill to Build Credit

Are you hoping to build your credit by paying your cable bill on time? Unfortunately, most cable companies, like many other utilities, don’t report payments to credit reporting agencies. With no information, it’s impossible for these agencies to use this information when calculating your credit score. So, making these payments on time typically doesn’t impact your credit score.

However, paying those bills with a credit card can affect your credit indirectly—and never forget that unpaid bills can often have a negative effect on your credit score. Keep reading to find out more about why cable and utility bills aren’t often reported to the bureaus and how to build credit regardless using these tips.

Are cable bills and streaming services reported to the credit bureaus?

Are you one of the millions of consumers paying monthly cable bills along with several streaming services, such as Netflix and HBO Max? While it may seem like making these regular payments shows a history of paying your bills on time, sadly, it doesn’t.

The harsh reality is that most cable and streaming companies don’t make a habit of reporting payments to any of the credit reporting agencies. Without any record of whether you pay your cable bill on time or not, these reporting agencies can’t include this information on your credit report.  

Does paying cable or internet bills help build credit?

Unfortunately, the short answer is no. Since cable companies don’t submit payment information to any of the credit reporting agencies, there’s no way for this information to impact your credit score. On the other hand, if you fail to pay your bills, it could damage your credit score.

Typically, when you miss paying your cable bill for several months in a row, the cable company will close your account. It may also transfer your unpaid balance to a collection agency. This agency will make multiple attempts to collect this unpaid balance. It also has the option to report this unpaid debt to one or all of the credit reporting agencies.

Since your payment history accounts for 35% of your credit score, having just one unpaid bill or late payment on your account can lower your score. These unpaid bills can remain on your credit report for up to 7 years, even if you eventually pay them off. However, the impact of these late payments lessens over time. For example, after 2 years or so, an unpaid cable bill won’t have the same effect on your credit score as a new unpaid bill.

What bills affect credit score?

If you want to build your credit, it’s important to understand what types of bills affect your credit score and which don’t. Here’s a look at the most common types of bills and an explanation of how they may affect your credit score.

How to build credit with bills

There are some steps you can take to make sure that paying your bills helps build your credit rather than damage it.

Payment history

Keep in mind that your payment history makes up 30% of your overall credit score. Therefore, it’s crucial to get in the habit of paying all your bills on time, even the ones that aren’t regularly reported to the credit reporting agencies. This step can eliminate the risk of having any negative payment information posted to your credit report. Additionally, having multiple positive tradelines on your account can also help boost your credit score.

Credit utilization

The amount of debt you owe also impacts your credit score. Lenders determine your credit utilization ratio by adding up all your debt and dividing it by the total amount of credit you have available. This ratio accounts for 30% of your overall credit score. It’s recommended to keep your credit utilization ratio below 30%.

Pay bills with a credit card

One of the best ways to build credit with cable and other utility bills is to use your credit card to make your payments. While your cable company doesn’t report these payments, your credit card will. Paying your cable bill with your credit card and then making on-time credit card payments can help improve your credit score.  This is true for other types of bills too, including utilities and medical bills.

If you don’t currently have a credit card, consider applying for one. If you’re unable to secure a traditional credit card, you may qualify for a secured credit card, which can still help improve your credit score. Credit card companies base your credit limit on a number of factors, including your annual income and credit history.

Good credit habits

Maintaining good credit habits, such as sticking to a budget, paying your bills on time, managing your debt utilization ratio and using your credit card to pay basic bills, can help you boost your credit score.

Get credit for regular bills with services like ExtraCredit

You may also be able to get credit for paying your regular bills on time through several financial services, including:

ExtraCredit

Credit.com’s ExtraCredit program can also help build your credit. Not only does ExtraCredit track your FICO score and provide frequent updates, it helps track your rent and utility payments as well, including your cable bills. Making sure these payments are part of your credit report can help boost your score and allow creditors to see your full payment history.

If you’re working towards building your credit, you likely want to make every payment count. Check out Credit.com’s ExtraCredit program to make sure both your rent and cable payments are being reported to the right agencies. 

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