How to Build Your Credit With a Utilities Bill

Building a solid credit history is a key to your financial wellbeing. With good credit, you can get the lowest interest rates and get approved for a car loan and mortgage. However, you don't just wake up one day with good credit; you have to build it over time. One of the easiest ways to do this is by successfully managing a utility bill in your name. Even if the utility provider doesn't report to the credit bureaus, utility payments are part of your FICO Expansion Score, which is used for people with limited or no credit history. Paying your utility bill on time will not only help to avoid late fees and service interruption, but you'll also be working towards a blemish-free credit history.

Instructions

1

Sign up for a necessary utility, such as a telephone or electricity. A credit check is often required for new customers, and a deposit may be necessary if you don't pass the credit check.

2

Budget a little extra money for your first month's bill. Some industries, such as wireless phones and cable companies, bill you in advance. As a result, you may have to pay for a partial month in addition to your monthly rate, plus installation or any other setup fees charged by the company. Being prepared for this bill can help you get started on the right foot.

3

Register for the utility company's automatic payment option, which takes your monthly payment from a checking account or credit card. This helps you to stay on top of your monthly payments.

4

Contact the utility company after a year of consecutive successful payments. Ask for your deposit if you were required to make one, as you've shown that you're a reliable credit risk. See if you qualify for a better rate due to your status as a loyal customer who always pays on time.