Can I improve my scores by providing you with letters of credit from my utilities?
Experian cannot add accounts to a credit report using letters from your utility company. In order to include account information, the utility company must meet the requirements of the Fair Credit Reporting Act (FCRA), such as updating payment information regularly and being able to respond to disputes within legally mandated timeframes.
Currently, utility companies do not typically report payments directly to Experian or the other credit reporting companies. Because credit scores are calculated using the information contained in your credit report, your utility payments would not be included in your credit scores. That doesn’t mean documenting your good utility payment history wouldn’t be helpful. In some cases your lender may consider documentation of your utility payments when determining whether to make a loan in addition to your credit history.
On the other hand, utility companies may sell unpaid amounts to collection agencies. Collection agencies may then report the debts to the credit reporting companies. As a result, not paying utility bills on time could end up negatively affecting your credit reports and scores.
In the future, utility companies may report positive payment information. Doing so could help many people establish credit for the first time, or restore a damaged credit history after a financial setback.
Thanks for asking.
The “Ask Experian” team