A credit score is an extremely important part of an individual's financial identity. The importance of a credit score understandably makes many consumers wary about being late on mortgage and car payments, but there are many who also worry about everyday bills, such as cable and utility bills. While the latter type of bills are not as directly tied to your credit score, they can still affect your credit.
Credit Rating
For lenders, a credit score determines your reliability as a borrower of money. The lower your credit score, the more risky a lender's money is in your hands. There are a variety of credit scores issued by various credit rating agencies. One of the best known scores, the Fair, Isaac FICO score rates credit on a scale of 300 to 850.
Extensions of Credit
Because credit scores are used largely by creditors to determine a potential borrowers worthiness to take out credit, the most important sources of credit information tend to come from instances in which credit has been extended to an individual, such as with a car loan or a home mortgage. If a borrower has a history of being late or defaulting on these kinds of payments, it is statistically likely he will do so again.
Cable Bills
Cable bills, like rent on an apartment, utility bills, parking tickets and any other number of routine payments, are not actually extensions of credit. Cable and utility companies do not normally report late payments to credit agencies. However, this is not always the case. Some companies will report to credit agencies sooner than others, and it is not always easy to tell which ones report and which do not.
Collection Agencies
When a cable bill goes unpaid, many companies will send the unpaid account to a collection agency, which will take over the bill-collection efforts. Unpaid bills are almost always reported to credit rating agencies by collection companies. These types of unpaid bills will certainly affect your credit.
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