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Does a Phone Bill Build Credit? Alternatives to Boost Your Score

Many bills can help build credit, but is your phone bill one of them?

Justin Cupler

Contributing Writer at Tally

April 20, 2022

Understanding the inner workings of credit reports and your credit score can be overwhelming and a bit confusing. With so many variables, it’s easy to get lost.

One common query is, “Does a phone bill build credit?” It’s a regular monthly bill, and some phone companies will perform a credit check before giving you service. So, it seems logical that it would be included when calculating your FICO®credit score. But as you may know — sometimes your credit score isn’t the most straightforward thing.

Below, we discuss whether a phone bill builds credit and review some of the more impactful ways to boost your credit score.

Does a phone bill build credit?

No, a phone bill generally will not build credit in the traditional sense. This is because utilities — like phone bills (cell phones included), electric bills and water bills — don’t appear on your Equifax™, Experian™ or TransUnion®credit report.

The reasoning is that these companies are not creditors, so they don’t need to report payments to your credit report. There is, however, one exception that we’ll get into next: Experian Boost.


What is Experian Boost?

Experian Boost™ is one way to get your bills that normally don’t appear on your credit report added to it and included in your FICO credit score.

Experian Boost connects to the bank account you use to pay all your bills and scans for recurring monthly payments, including phone bills, electric bills and even streaming services like Netflix. It then prompts you to verify that these are recurring payments and uses them as evidence of on-time payments.

Since on-time payments account for 35% of your FICO credit score, you could see your score increase over time. The interesting part is, if you make a late payment, it won’t negatively impact you unless the account goes to a collection agency.

However, Experian Boost only impacts the FICO Score based on your Experian credit report. This means that if creditors pull a FICO Score based on your TransUnion or Equifax credit report, your accounts that Experian Boost includes won't be factored into that credit score.

Is Experian Boost worth it?

Experian Boost is 100% free, so there’s no cost to use the service. While the increases to your credit rating are generally small — around 10 points — even small increases are great when there’s no cost involved.

The downside to Experian Boost is you have to give the credit bureau access to your bank accounts. It then scans your bank accounts looking for posted recurring payments to add to your credit report. While this isn’t a big issue in most cases, the Equifax data breach has taught us that even the credit bureaus aren’t immune to data breaches, and your banking information is something you may not want to leave at risk.

With just one vulnerability, a hacker could easily have access to your banking information.

What’s the best way to build credit?

While Experian Boost may give you a credit score increase based on bill payments like a cell phone bill or utility bill, its impact is small and only affects your Experian credit report. There are other options with a more significant and broader reach for those looking to build credit.

Get and use a credit card

Using a credit card for your daily expenses and then paying the statement balance in full every month is one of the best ways to build credit history. Using your credit card and making the payment shows that you actively use credit and are building a strong on-time payment history. And by paying it in full, you’re using the interest grace period to avoid all interest charges.

If you don’t already have a credit card and can’t get approved for a traditional credit card, you can opt for a secured credit card. A secured credit card requires a cash deposit equal to the credit limit, but it works just like a normal credit card. If you don’t pay your bill, the credit card company will use your deposit to pay it off.

In some cases, after having a secured credit card for a specific amount of time, the credit card issuer will offer you a traditional credit card and refund your security deposit.

One downside is if you get a new credit card, you’ll have to apply for one and go through a hard credit inquiry, which can negatively impact your credit score.

Become an authorized user

You can also ask a friend or family member to add you as an authorized user on their credit card. As an authorized user, you can use the credit card account for purchases and may receive your own card attached to the account. However, you cannot make changes to the account, such as updating the address, payment information or phone number.

You may also see this account appear on your credit file, along with its payment history. This can help boost your FICO score. However, keep in mind that if the cardholder racks up tons of debt or has a missed payment, this could also hurt your credit score.

Take out a credit builder loan

Credit builder loans are personal loans where the lender places the loan proceeds in an account instead of giving them to you. You then make a normal monthly payment according to the loan terms. Then, once you’ve paid off the loan, the lender releases the funds to you.

Because you’re making monthly payments on the loan, this helps build a positive payment history, which can help you build a good credit score.

The only downside to this is that you’ll have to apply for a new loan, which will involve a hard inquiry on your credit. Too many hard inquiries can lower your credit score.

Reduce your credit utilization

Your credit utilization ratio — the amount of revolving debt, such as credit cards and lines of credit, divided by your total credit limit — is included in the “amounts owed” available in calculating your credit score. The "amounts owed" factor accounts for 30% of your credit score and factors in your credit utilization ratio, amount owed on all accounts, the types of accounts you owe money on and how many accounts you owe money on. So, maintaining a low credit utilization ratio may help increase your credit rating.

You can quickly reduce this ratio using the debt avalanche or debt snowball method. The closer to 0% your credit utilization ratio is, the more positive of an impact it has on your credit score.

A phone bill can build credit, but there are better options

Does a phone bill build credit? Traditionally, it does not. However, it can increase your FICO Score based on your Experian credit report with Experian Boost, but there are far better options including using a credit card, taking out a credit builder loan and reducing your credit utilization.

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