Credit Myths Debunked Part 1: Timely Bill Payments Boost Your Credit | Refresh Financial
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Credit Myths Debunked Part 1: Timely Bill Payments Boost Your Credit

boost your credit

It’s pretty common to come across someone who explains, matter of factly, that their credit is being built by paying their cell phone bills, or water bills or electricity bills on time. Frustration will soon set in when their credit rating goes nowhere fast. There’s a reason for this: paying bills on time won’t boost your credit rating. In fact, making bill payments won't be reported to the credit bureaus at all.

I know, I know. You’re thinking, “but that one time I didn’t pay my cable bill, it left a mark on my credit!” and you’d be right. Not paying your bills can have an effect on your credit score.

Confused yet?

Don’t worry, it’s not as complicated as it sounds. The fact is, bill payments don’t get reported to credit bureaus unless or until they have been handed off to a collection service, and that usually doesn’t happen unless you’ve failed to pay the bill in question for a significant amount of time.

I don’t have to tell you that it’s good practice to stay on top of your bills. You know that late fees can be enormous and the amount you owe will just snowball the longer you wait to pay it. So, even though paying your bills on time every time won’t give you better credit, not paying them will cost you a lot more money in the long run.

If I’ve just foiled your credit building plan, worry not! There are easy alternatives for building your credit and here are just a few:

  1. Get a secured credit line from your financial institution.
  2. Apply for a secured credit card.
  3. Get yourself started in the Refresh program, and save while you build credit. Click here to sign up!

Did you know that bills can only damage and not boost your credit? Do you think this is fair? Let us know in the comments!

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Hi a few months ago I was rejected for getting a new phone through a contract because of my poor credit rating due to old credit. No one would give me a chance until I started paying monthly payments to Refresh Financial. Now thanks to you I was approved for a new phone under a contract and it feels great not having to waste all that money on prepaid minutes for my phone even if I never used them. Now I’m saving money, rebuilding my credit and I owe it all to you. ”

Ashley, Stellerton, NS