Some people when asked about their positive credit lines will say, “I pay all of my bills on time. I’ve never been late on my electric, cell phone, cable, etc.” What most people do not realize is those bills do not report to your credit in most cases unless they are in collections. The number one key to having good credit is to pay your bills on time, however, if they do not report to the major credit bureaus they are not building your positive payment history.
If you find yourself in a similar position, one of the best options for building your credit without changing your monthly budget is to change the way you pay. Use a credit card to pay the monthly bills that do not report to your credit and then pay your credit card off each month. Let’s take your cell phone bill for example. If you were to set it up to be automatically paid on the due date by your credit card, and then pay your credit card in full on the due date you would not incur interest and your monthly budget would remain unchanged. Now you have an active credit card that reports to the three major credit bureaus and has activity. Your cell phone bill is always paid on time, and as long as you pay your credit card on time you are building the history.
This is a great step for consumers with little or no credit, or for those with previous credit issues to reestablish credit and begin bouncing back.