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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In February 2015, I tried to apply for a loan so I could pay off my school debts and my credit card. At least put a dent into my payments. Well, things went all wrong and I was denied for approval of a loan.

Refresh Financial contacted me, concerned as they are to help individuals like myself to have a better future. We went over my finances and decided that the Refresh Financial loan will bring up my credit score to apply for a loan.

I was greatly impressed when every month I saw my credit climbing to the numbers I wanted from the beginning. I was entirely happy for my credit score being higher. My job as well, I made it possible to pay bi-weekly on my payments. With that being said, I learnt to pay my outstanding bills instead of spending money.

I only not have better credit, I have better spending habits and I am happy with the results! ”

Jessica, Frog Lake, AB