Any time you read something about improving or maintaining your credit score, one of the pieces of advice listed is: “Always pay your bills on time.”
So if I’m a few days late with my cell phone payment and cable bill, would Verizon and Cablevision get on the hotline to the credit bureaus and report me? It just doesn’t seem worth the trouble for them. Anyone have the straight dope on this?
Assuming we’re talking about utility bills (and not loans or credit cards), then late payments generally won’t show up on your credit report unless your account goes to a collection agency, which typically takes 60-90 days to happen.
I say “generally” because I’m not 100% sure–I only know what banks and utilities (I had a few billing problems when I moved recently) have told me.
Metacom is right; utility companies generally will not report a delinquent account to credit bureaus unless it goes into collections. Credit card companies and banks however, definitely will report payments that are more than 30 days late. (And there are separate categories for 60 and 90 days late as well, which hurt more.) So if you can’t afford to pay all your bills on time, give priority to loans and credit cards, then utilities.
Every time you pay a bill, a notice is sent to the credit agencies. If the payment is late, that is noted. If it’s paid in full, that’s noted; if you make a partial payment, that’s noted, too.
How it affects your credit score depends on the pattern. A single late payment is not going to wreck your credit, but the more times you’re late, the bigger the red flag.
They will always send you a second notice before reporting you to a credit bureau. It covers thier butt in case the first one got lost in the mail. But, if you go over 90 days late more than once they may not be so generous the next time and will usually tell you so in writing before hand or make you put down a security deposit.
The strange thing is, once you start getting a rep for being late on your bills, the more high interest credit card and loan consoladation offers you will recieve. Theses are the same SOB’s that want to make it more difficult for people to declare bankruptcy. Go think.
In my experience, no. It’s not worth the trouble to them to do so. If you were profoundly late, say 30-60 days without paying your bill, it’s possible that some companies would report it, but that has not been my experience either. They will most likely just shut off your service. If you continue not to pay it even after service has been cut off and it goes to a collection agency, expect to see it on your report at that point.
Before I cleaned up my act, I had seriously bad habits when it came to paying bills. I had terrible credit as well, but none of it was due to unpaid utility bills.
One thing to consider. If your credit rating is spotty and you are trying to obtain a mortgage, some mortgage companies will ask you for letters of reference from your utility companies stating that you have had a history of paying those bills on time. If you have not been good with it, you may run into some problems there.
One common misconception that people have is that creditors will pick up the phone and call the credit bureaus to say “John Jones is 31 days late with his payment.” It doesn’t work that way.
Businesses who report information to the credit bureaus send a computer file once a month which contains data on ALL of their customers–good, bad or indifferent.
The file contains such information as current balance due, original balance, highest balance, monthly payment amount, and a whole bunch of other stuff.
One of the things that they CAN report (although they are not required to) is an 85 month payment history, showing the months paid on time, 30 days late, 60 days late, etc.
As other posters have mentioned here, most utilities do not generally report credit information, but credit card companies and loan companies almost always do.
How about cell phones, cable TV, apartment rent, car insurance, etc.?
As a general rule of thumb (although there are exceptions), if a creditor is charging you interest (credit cards, bank/credit union loans, car payments, department stores, etc.) they will almost always report to the credit bureaus. If they do not charge interest (utilities, insurance, rent, etc.) they do not.
Collection agencies also will almost always report you.
Indeed, the creditor will report the account as charged off to profit and loss or account sold or account referred to collection agency. And then the collection agency will report the debt again. So you will see two entries for the same debt on the credit report. The precise consequences of this for your credit *score * are difficult to determine.
I don’t know if you can call that a general rule. My cell phone company doesn’t report to an agency or to a credit reporting center if you’re late and we do charge a month late fee. Nor does our cable company (again, they charge interest) or any bill company I can think of.
I check my credit yearly and get a detailed report. Never seen it on my reports.
I also have scanned probably 20,000 credit reports over the years. I have never seen an “R2-6” rating on any utility bill (R 2 = 30 days late, R3 = 60 etc). Get late on a credit card and it will show up but on a normal utility bill, it wont. Only if you begin to default will it appear (mostly as a collection item).
So being a little late on utility bills is safe. Just don’t have it go into collections (mostly after non-payment for 90 days and cancellation of service).
There is a big difference between interest and late fees.
Most institutional creditors (banks, mortgage companies, credit card vendors) report to the bureaus. Most other creditors (utilities, landlords, cell service providers, cable companies) do not. If anything you will see an entry (as others have said) after you are in default and on your way to collection.
Most collection agencies report to the bureaus. This is one of their strongest tools.
Oh sorry, I misread that.
Yeah, interest =! late charges.
This is not accurate.
Payments over 30-days late are noted as part of the standard reporting format that creditors send to credit bureaus. Pay a few days late every month and there is nothing to report to a credit reporting agency.
What gets reported?
Virtually all Loans (Installment, Morgtage, equity, mobile home loan, student loans and deferred loans)
Revolving Accounts (Credit Cards, other debt with minimum or changing payments based on balance)
Open Accounts (Balance is due now/this month, such as collection accounts, American Express)
Public Records (liens, judgements, foreclosure, bankruptcy
SCORE info: Make a payment 35 days and it hurts a little on the score. Yes, a little. However, a creditor and/ro creditor modelling tool might automatically decline you based on a recent delinquemcy. Other creditors who you do business with might monitor your file and cut your line of credit, reduce your limit, close your account or boost your interest rate.
So, the SCORE shows a minor ding, but the fact that you are late very recently affects your credit worthiness to many.