Does Paying For Internet Build Credit?

If you’re like most Americans, you likely have a home internet plan to provide you with internet while you’re at home, and so you might be wondering, does paying for internet build credit? This post provides you with everything you need to know about internet and whether it builds credit.

Does Paying For Internet Build Credit?

Paying for internet does not build credit because ISPs (internet service providers) do not report payments for internet to the credit reporting bureaus. Therefore, even if you’re making all of your internet payments on time, you will not build any credit since your payment history does not appear on your credit report. Likewise, missing payments on your internet does not damage your credit because payments are not reported to the credit bureaus and therefore do not appear on your credit report.

That said, although your missed internet payments are not reported to the credit bureaus and don’t appear on your credit report, if you leave an internet bill unpaid for too long, it can indirectly hurt your credit.

This is so because leaving an internet paid for too long may not only cause your internet to be cut off, but it may result in the outstanding amount that’s due to be sold to a collection agency. The collection agency can then cause damage to your credit by placing a collection account on your credit report to collect the debt from you.

A single collection account can lower your credit score by 100 or more points and will remain on your credit report for 7 years from the date you first failed to pay your internet bill. When a collection account is first added to your credit report, it will cause a big drop in your credit score.

However, as the collection account ages, its impact on your credit score will lessen until it’s automatically removed from your credit report after the 7 year period.

Once a collection account appears on your credit report, it cannot be removed from your credit report unless there is an error in the information being reported on your credit report.

Even paying a collection account will not remove it from your credit report. In fact, a paid and unpaid collection account affects your credit score the same. So, to avoid having your internet bill from being sent to collections, you should pay the outstanding amount that’s due before it’s sent to collections.

Why Doesn’t Paying Your Internet Bill Build Credit?

Paying your internet bills does not build credit because your payments are not reported to the credit reporting bureaus. Since they’re not reported to the credit bureaus, they do not appear on your credit report, and therefore they have no impact on your credit score.

So, whether you make all of your internet bill payments on time or miss them, there will be no impact on your credit score. Unpaid internet bills can affect your credit score if they’re sent to a collection agency because the collection agency can cause damage to your credit by placing a collection account on your credit report.

That said, if you use a credit card to pay your internet bill, you can build credit by using your credit card responsibly, keeping your credit card balance low, and making your credit card payments on time. When you use a credit card to make your internet payments, the internet payments are not what is helping your credit, but rather your responsible use of the credit card, and making timely monthly payments is what helps your credit.

Making timely credit card payments improve your credit because your payment history accounts for 35% of your credit score. So, making credit card payments on time can boost your credit score. That said, missing even a single payment on your credit card can cause significant damage to your credit. So, if you choose to pay your internet using your credit card, make sure to make your credit card payment on time to build good credit.

Using Experian Boost To Report Your Internet Bills On Your Credit Report

If you make your internet payments on time and you want your credit to benefit, you should explore the option of signing up for Experian Boost. Experian Boost allows you to report utility bill payments, such as internet payments on your credit report to use them to boost your credit score. Experian Boost is very easy to use, you just connect it to your bank account, it scans your bank statements for bill payments that you can use to build credit, and it adds them to your credit report to boost your credit score. It works immediately. So, if you want to boost your credit score by a few points using your internet bill, explore Experian Boost.

Importance of Paying Your Internet Bill On Time

As previously mentioned, although paying your internet bill on time does not build credit since your internet payments are not reported to the credit bureaus, as such they have no impact on your credit score. You should pay your home internet and cell phone internet bills on time to avoid having your ISP sell your unpaid bill to a debt collection agency. Debt collection agencies can cause damage to your credit by adding a collection account to your credit report when attempting to collect the unpaid debt from you. To avoid this, pay your internet bill on time. If you’re having difficulty paying your bill, contact your ISP and ask them about the options you have. This is better than having your bill sent to collections.

Frequently Asked Questions (FAQs)

1. Does paying for Wifi Build Credit?

No, paying for WiFi does not build credit because internet payments are not reported to the credit reporting bureaus. Therefore, even if you make all of your payments on time, doing so will not improve your credit.

2. Does internet affect your credit score?

Internet does not affect your credit score because your ISP does not report your payments to the credit reporting bureaus. Therefore, making payments will not improve your credit, and late or missing payments do not appear on your credit report nor do they affect your credit score.

3. Does paying your phone bill build credit?

No, paying your phone bill does not build credit because your phone provider does not report your payments to the credit bureaus. Therefore, making or missing payment has no effect on your credit score.

4. Does paying internet bills late hurt my credit?

No, paying internet bills late does not hurt your credit because your payments are not reported to the credit bureaus. However, if you delay paying your internet bill for too long, your ISP may sell the unpaid balance to a collection agency. The collection agency can cause damage to your credit by adding a collection account to your credit report.