Can accounts that aren't on my credit report affect my score?
I'm in a tight spot financially and won't be able to pay all my bills this month. Something's got to give and since my rent and utility bills are not listed on my credit report, they'll be the first ones to slip. Should I let these bills go late instead of other bills like my credit cards that are listed on my credit report?
Though your FICO® score captures a pretty accurate picture of your credit history, not every account is recorded. You're assumption is right in that your good history of rental and utilities payments are not listed on your credit report. Even though your landlord, the cable and cell phone providers are pleased with your timely payments, this positive information isn't reported to the credit bureaus. That being said, there are a couple important reasons why you should continue to always pay these bills on time:
- Reported delinquencies:
Even though your good payment history isn't reported, if you go late on these bills, your landlord or utility department has the right to report your bills as delinquent to the credit bureaus. If the bill continues to go unpaid, a judgment could be obtained against you in small claims court, and/or your account could be turned over to a collection agency. Any of these blemishes to your credit report can be as harmful to your FICO score as the more commonly reported items such as late payments on loans or credit cards.
- Future referrals:
The next time you need to move, your potential landlord is likely going to require a copy of your FICO score and credit report. In addition, he/she may want to contact your current landlord to check if you paid your rent on time. Even if you have a high FICO score, a potential landlord could choose another candidate if your current landlord reports that the rent is paid late or incomplete. As with any account, it's wise to pay on time and avoid burning your bridges. You may need them to put in a good word for you in the future.
The best advice is always to not take on more than you can handle and pay your bills on time. If that isn't possible, look to others for support. Before going late on any obligation, call the landlord or your utility company and tell them of your situation they may be willing to work something out with you until you get on your feet again.
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The FICO Score is the standard credit score in the US, used in more than 90% of lending decisions.