The most efficient way to keep your credit score up is by paying your bills on time. That said, not all the payments you make will affect your credit score. While it’s a good idea to anyway keep all your payments up, knowing which ones contribute to your credit score can help you avoid missing payments that can have an immediate impact on your credit report.
Bills that Are Not Reported to Credit Bureaus
Payments that are not reported to credit bureaus include your utility payments, health care and medical bills, insurance payments, cable service, cell phone payments, and membership to gyms or health clubs. When it comes to rent payments, most landlords don’t report this to credit bureaus. However, of late, some landlords have begun to report rent payments as well.
This essentially means even if you are a few days late in paying these bills, you need not panic. That said, it doesn’t mean that you ignore paying these bills either. Not paying your bills on time could lead to you having to pay a penalty of late fees. What’s more, if you miss a series of payments, the biller will sell your account to a debt collection agency. Once a debt collector takes over, the credit bureaus will be informed of your payment defaults, which can then lower your credit score.
Payments that Impact Your Credit Score
Certain payments you make, however, will be reported by billers to the credit bureaus every month. These payments include your credit card bills, mortgage, home loan equity lines of credit, student loans, auto loans, home equity loans, and personal loans.
Keep in mind that lines of credit and credit card have a greater impact on your FICO credit score than monthly installments you pay for other loans. Most billers will only report your payment default if you delay making the payment by 30 days. So, if you are 10 days late to make a certain payment, your payment delay won’t be reported to the bureaus.
Regardless of whether your payment is reported or not, it is best to set up an automatic payment or at least a reminder so you don’t miss making your payments!