What Bills Help Build Credit?

By Ana Gonzalez-Ribeiro, MBA, AFC®
Published on: 12/02/2022

You may know that failing to pay bills can ding your credit, but the opposite can also prove true — simply paying your bills on time may improve your credit. According to FICO®, the single largest factor influencing your credit score is payment history, and that can now include your monthly bills.[1] This article addresses which bills can help build credit and what to watch out for along the way.

What bills impact your credit score?

Traditionally, credit reports included payments on two types of accounts: revolving credit (such as credit cards) and installment loans (such as car loans and mortgages). Recently, however, some credit scoring models have begun to incorporate payments on other types of bills — as long as service providers report that information. While not all companies share positive payment data with the major credit bureaus, you can take steps to have your history of on-time bill payments included.[2]

What bills help build credit

Utility bills

Paying your monthly utility bills — water, gas, trash, electric, cable and internet — can help you build your credit if those payments are paid on time as agreed and are reported to the credit bureaus. Unfortunately for consumers who pay on time, utility companies generally don’t report payment information to the credit bureaus (unless your account is charged off or sent to a collections agency, which could then hurt your credit). However, you can register for services like Self that help you add positive utility payment histories to your credit file, potentially benefiting your credit score.[3]

Rent payments

Like utility bills, on-time rent payments may improve your credit if the credit bureaus receive that information. However, like utility companies, landlords and rent management companies rarely report rent payments. Although you can’t submit this information yourself, you can hire third parties to report your rental payment history to the credit bureaus. Some third-party services help you report rent, utilities, cell phone bills and more.

Property managers can also sign up for landlord rent reporting services such as RentTrack, which reports residents’ rent payments to all three credit reporting agencies. Check if your landlord is already enrolled in a rent reporting service before enrolling on your own. Then compare the costs and program features of both to see which works best for your needs.

Keep in mind not all scoring models include rental information in their calculations. Although VantageScore® plus FICO® 9 and FICO® 10 do consider it, these are not commonly used scoring models.[4]

Mortgage payments

While taking out a new loan may temporarily drop your credit score, responsibly managing a large account like a mortgage can play an important role in helping you build credit. In addition to contributing to your credit mix, typical home loans often have long repayment periods that can eventually improve your credit history if you pay on time as agreed.[5] Of all credit scoring factors, payment history has the biggest impact. Making on-time mortgage payments can likely bump up your credit score, while missing payments or paying late can cause it to fall.[1]

Medical bills

Medical bills won’t build your credit because medical providers typically don’t report to the credit bureaus. However, unpaid medical debt can hurt your credit.

Unpaid medical bills over $500 that have gone into collections appear on your credit report. However, two bits of good news may provide relief for individuals who have struggled with medical debt. First, as of July 1, 2022, medical collection debt that has been paid will no longer show up on credit reports. Second, the length of time before unpaid medical collections accounts appear on your credit report has increased from six months to one year, providing additional time to pay off the debt before it affects your credit history.[6]

Student loan payments

Like any other loan, student loans can affect your credit both positively and negatively. Although making late payments or defaulting on your account can damage your credit, student loans can also help your credit score. As you make your monthly on-time payments, the amount owed goes down and your credit score should be positively impacted. Managing your student loan responsibly may have long-term benefits — as long as you make on-time monthly payments and pay off your loan on or before by the final due date, your student loan can appear on your credit report for 10 years after you finished paying.[7]

Auto loan payments

Auto loan payments can also potentially impact your credit score. Along with student loans and mortgage loans, auto loans are a type of installment loan — a type of credit that requires regular payments over a set period. Assuming you make your on-time monthly payment each month, you may eventually see a bump in your credit score. However, because payment history gets factored heavily into your credit score, if you don’t make regular timely payments, you could see a negative impact on your credit score.[1]

Credit card payments

Credit cards offer one of the more popular ways to build credit, and credit cards can provide benefits to consumers with a wide range of credit scores. If you have a strong credit history, you may qualify for multiple credit card options, and card issuers may offer you a lower APR than typically available to those with a bad credit score. Consumers with poor credit might look into a secured credit card — secured cards require a security deposit to open.[8]

In either case, paying your credit card bills on time can affect your payment history, and keeping credit card accounts open as well as keeping your credit card balance low can both help to maintain a low credit utilization rate. All of these factors play a part in improving your credit.[1]

Cell phone bills and financing

Financing a cell phone can potentially impact your credit score if you go through phone manufacturers like Apple and Samsung which use banks for the financing. Because wireless carriers generally don’t furnish data to credit reporting agencies, however, financing a cell phone through your carrier won’t likely affect your credit. For the same reason, paying your monthly phone bill probably won’t impact your credit either (unless you don’t pay your bill and eventually your account gets sent to collections).

How credit reporting works

A credit report contains a myriad of information including personally identifiable information like your name and social security number, how you have managed your credit accounts, how many credit inquiries you have and their type, and public record and collections information.[9] Three major credit bureaus — Experian, Equifax and Transunion — compile data submitted by lenders and debt collectors and that information is then used to calculate a credit score. Your FICO® credit score takes the following factors into consideration:[10]

How credit reporting works

  • Payment history (35%): The single biggest factor in your credit score, your history of payments — both positive and negative — makes up over a third of your score.
  • Amount of debts owed (30%): The second most important factor calculates the amount of available credit that you are currently using. Using too much of your available credit can be interpreted by lenders that you’re overextended.
  • Credit history (15%): This category considers the age of your accounts — oldest account, newest account and average age of all accounts — in calculating your credit score. In general, more established credit histories can help improve your credit score in this category.
  • Credit mix (10%): A good credit score often shows a diverse mix of credit types, from credit cards and retail accounts to mortgages and installment loans.
  • New credit accounts (10%): Opening several new accounts — or even applying for them — might have a negative impact on your credit score, especially if you have a limited credit history.

How to build credit

If you have a poor credit history, or no credit history at all, you may need to take steps to prove to lenders, landlords, insurers and other parties that you will pay your bills. This concept of creditworthiness could impact your ability to take out loans, open credit cards or obtain a mortgage to buy a house, as well as the interest rate and other terms related to your account.

Tips to help build credit

The following tips can help you build or rebuild credit:

  • Check your credit report regularly: Knowing what’s in your credit report enables you to keep tabs on financial issues, take steps to correct errors and establish a baseline for your credit-building efforts.
  • Always make payments on time: Since payment history counts for over one third of your credit score, you should prioritize making on-time payments.
  • Avoid using your whole credit limit: To maintain a healthy credit score, avoid using over 30% of your total available credit.
  • Limit hard inquiries: Applying for new credit accounts may result in hard inquiries, which might temporarily ding your credit score.
  • Keep revolving credit accounts open: Both open and closed accounts on your credit report can affect your score, but closed paid accounts generally drop off by the 10-year mark. Sometimes it makes sense to close an account (to avoid an annual fee, for example), but sometimes it doesn’t: since your credit score includes the average age of accounts, credit mix and current credit utilization ratio (CUR), keeping accounts in good standing open may actually benefit you more. Having a credit card open with a zero or low balance offers you a higher total credit limit across all accounts. So when you calculate your CUR (your total revolving debt divided by your total credit limits), having a higher total credit limit may help lower your CUR.

Credit building takes time and consistency

You can’t build credit overnight — bettering your score and improving personal finance takes time, patience, effort and responsible financial management. If you have no credit history or low credit scores, Self’s Credit Builder Account offers an ideal starting point to build or rebuild credit. Making on-time loan payments each month helps build positive payment history, a crucial ingredient in a good credit score.


  1. MyFICO. “What's in my FICO® Scores?,” https://www.myfico.com/credit-education/whats-in-your-credit-score. Accessed on July 15, 2022.
  2. Experian. “What Kinds of Bills Affect Credit Scores?” https://www.experian.com/blogs/ask-experian/what-kinds-of-bills-affect-credit-scores. Accessed July 12, 2022.
  3. Experian. “Can Utility Bills Appear on Your Credit Report?” https://www.experian.com/blogs/ask-experian/can-unpaid-utility-bills-appear-on-your-credit-report. Accessed July 12, 2022
  4. U.S. News & World Report. “How Can You Get Credit for Paying Rent?” https://money.usnews.com/credit-cards/articles/how-can-you-get-credit-for-paying-rent. Accessed July 12, 2022.
  5. Experian. “Does a Mortgage Hurt Your Credit?” https://www.experian.com/blogs/ask-experian/does-mortgage-hurt-credit-score. Accessed on July 15, 2022.
  6. Equifax. “Can Medical Collection Debt Impact Credit Scores?” https://www.equifax.com/personal/education/credit/score/can-medical-debt-impact-credit-scores. Accessed on July 15, 2022.
  7. Experian. “Do Student Loans Help Build Credit?” https://www.experian.com/blogs/ask-experian/do-student-loans-help-build-credit. Accessed on July 15, 2022.
  8. Experian. “How to Use a Credit Card to Build Credit,” https://www.experian.com/blogs/ask-experian/how-to-use-a-credit-card-to-build-credit. Accessed on July 15, 2022.
  9. MyFICO. “What’s in Your Credit Report?” https://www.myfico.com/credit-education/whats-in-my-credit-report. Accessed on November 15, 2022.
  10. Experian. “Credit Report Basics,” https://www.experian.com/blogs/ask-experian/credit-education/report-basics. Accessed on July 15, 2022.
  11. MyFICO. “How to Build Credit,” https://www.myfico.com/credit-education/credit-scores/how-to-build-credit. Accessed on July 15, 2022.

About the author

Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a Bilingual Personal Finance Writer and Educator dedicated to helping populations that need financial literacy and counseling. Her informative articles have been published in various news outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal financial and motivational site www.AcetheJourney.com and translated into Spanish the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP. Ana teaches Spanish or English personal finance courses on behalf of the W!SE (Working In Support of Education) program has taught workshops for nonprofits in NYC.

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Our goal at Self is to provide readers with current and unbiased information on credit, financial health, and related topics. This content is based on research and other related articles from trusted sources. All content at Self is written by experienced contributors in the finance industry and reviewed by an accredited person(s).

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Written on December 2, 2022
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