Does Paying Electric Bills Boost Credit?

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There are plenty of ways to improve your credit score, such as having a timely payment history with loans and credit cards. Utility bills, however, are not routinely reported to credit bureaus like loan and credit card payments and aren’t factored into your FICO® score. In fact, utility bills only appear on your credit report if they are not paid on time, which could have a negative impact if you were to apply for an electricity plan in the future. 

This doesn’t mean that you should dismiss your electric or utility payments if you want to improve your credit score! Here’s how you can make your electric bill work for your credit and discover more economic electricity plan options if you have bad credit.

Can Paying Electric Bills Build Credit?

While electric bills don’t contribute directly to your credit score, using a tool such as Experian Boost will report on-time utility payments to your FICO® score (users see an average increase of 13 points). 

Even without credit-boosting tools, paying your electric bills on-time is important for a number of reasons, including building good payment habits and establishing a reputable payment history with your electricity provider. These positive attributes can benefit you later if you apply for any sort of loan (e.g. apartment, car, house, etc.), or if you ever miss a utility payment, your provider may be more lenient due to your payment history.

What to do if You Miss an Electricity Payment

Missed and late utility payments happen, even if you’re the most reliable customer. In the event that you miss an electricity payment, you should take proactive measures and try to pay your bill as quickly as you can. If that isn’t possible, there are a few things you can do:

• Request a short-term extension from your utility provider or ask for a payment plan if you need more time to pay your bill. 
• Understand that late fees may penalize delinquent payments, but you may be able to negotiate with your electricity provider to waive the fees. 
• Consider signing up for a prepaid, or pay-as-you-go, electric plan, like those from Payless Power.
• Set up an auto-pay schedule so your bills are automatically deducted from your bank account.

If you’re experiencing financial hardship, the Low-Income Home Energy Assistance Program (LIHEAP) may provide some relief.

How Bad Credit Affects Your Electricity

Paying your utility bills on time will help you avoid electricity disconnection from your electric provider, but it does not help you build credit alone. 

If you have a poor credit score and are having trouble getting approved for a traditional postpaid electricity plan because you can’t pass the credit check, it may be time to look into prepaid electricity plans. No deposit and no credit check prepaid electricity plans from Payless Power ensure that you will have the energy necessary to power your home instantly and turn your lights on same-day.

Prepaid Electricity Plans: A Solution for Poor Credit Scores

There can be so many reasons for a less-than-perfect credit score. The Public Utility Commission of Texas (PUCT) addressed the problem of consumers having bad credit scores by coming up with different no deposit and no credit check plans. These electricity plans are based on daily, weekly or monthly payment models and are open to all sorts of customizations. 

Certain Texas electricity providers require that customers meet certain qualifications in order to receive a prepaid electricity plan, such as how successful customers are in making utility payments on time, how long ago individuals signed up for service, and the frequency of late utility payments made, if any. At Payless Power, everyone is instantly approved for a prepaid electricity plan regardless of their payment history or credit score. Read below for how people with poor credit scores can benefit from a prepaid electricity plan.

Electricity with No Credit Check

Certain electricity companies do not require checking credit scores in order to approve customers for their service. Taking credit scores out of the equation removes a possible barrier to getting energy and ensures consumers that no matter their payment history, they are qualified to receive electricity and can get instant access to energy almost immediately after signing up.

Pay As You Go

With prepaid electricity plans, instead of having to provide an initial fee, customers have the opportunity to pick what they pay, offering flexibility with utility payments and freeing people from the load of paying a large lump sum at the end of the month. With the option to pay as you go in increments, consumers can maximize their energy use while also being mindful of their consumption, minimizing the total cost of electricity.

No Deposit Necessary

The standard deposit required for electricity can be a high cost just for the ability to receive energy. In the case of many prepaid electricity plans, consumers are able to forgo that expense and still get energy to their homes. This puts money back into customers’ pockets, allowing them to focus on paying for the electric service they receive every month instead of just getting service from an electric company in the first place.

Get Approved Instantly No Matter Your Credit Score

If you are looking for a flexible and convenient energy plan, a no credit check plan is right up your alley. There are no strings attached to the costs and no extra fees, contracts or penalties. Your money is secure and only the amount you use is what you are charged on your bill. Moreover, there are several plans for daily use which allow you to limit your usage based on your budget and expense limit. This is the most no-nonsense way to approach your electricity needs while remaining secure and keeping a hold of your money. The best part is that they do not expect anything more out of you and will not ask you to prove anything else. Get approved instantly and get exactly what you need.

Get Approved for Prepaid Electricity Regardless of Your Credit Score Today!

While paying your utility bill on time will not help you build credit, making payments on time is a good habit to build for improving your credit score in general. Remember, if you do struggle with paying your utility bills on time, you can be reported to credit bureaus, which will negatively affect your credit score. However, if you do have a poor credit score, you can still get the electricity critical to your daily needs by signing up for a no deposit, no credit check prepaid electricity plan. Get instantly approved for prepaid electricity regardless of your credit score today!

Frequently Asked Questions

Q: Can I Get Credit for Paying My Electric Bill?

A: Paying your electric bill does not directly contribute to your credit, but it does have several positive benefits other than keeping your lights on, such as building good payment habits, consistent payment history, and rapport with your electricity provider.

Q: What Should I Do if I Miss an Electricity/Utility Payment?

A: If you miss an electricity payment, you should try to pay your bill as quickly as you can. If that isn’t possible, you can request a short-term extension from your utility provider or ask for a payment plan if you need more time. Understand that late fees may apply to penalize delinquent payments, but if you’re a reliable customer, you may be able to negotiate with your electricity provider to waive the fees. In the event that you’re experiencing financial hardship, government programs such as the Low-Income Home Energy Assistance Program (LIHEAP) may offer some relief.

Q: How Can I Make Sure My Electric Payments Build My Credit?

A: Although your credit score doesn’t directly factor in utility payments, you can use services such as Experian Boost, which report all on-time electric bills to FICO®, to increase your credit score. 

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