Credit scores and factors affecting the same

There are various factors which affect the credit scores. Since the credit scores are computed versions of the credit reports, they are also based on the same factors like the credit reports. These factors include the payment history of the debtors, their income, debts cleared, loans taken and duration for the same, previous bills and credit card dues and various other related factors. All kinds of bills affect the credit scores. These include the credit card bill, medical bills and even utility bills. Hence the non payment of the utility bills can reflect poorly on the credit scores. The impact or the extent of its influence depends on the amount of the bills, late fines and duration of non payment. The longer the dues are not paid the lower the credit scores fall.

 



Non payment of utility bills

The non payments of utility bills are usually associated with other financial problems. Usually those who are in multiple debts like over due loans, credit card debts and other bills are under sever financial pressure. To add to their woes the lenders are constantly harassing them for repaying their bills. As a result the debtors often accumulate money for the higher amount bills instead of the lower amount ones. Hence the utility bills are often forgotten in this context. These utility bills include Security companies, Cell phone companies, Water companies, Gas companies, Cable companies, Internet Companies and other similar costs.

Improving credit scores by paying utility bills

The credit scores can be drastically affected if the utility bills are paid on time. The piling of these utility bills keeps on adding to amount of higher interest rates. As a result the principal amount remains same but the late fines and additional penalties add up to a whopping figure. By repaying some of these bills the credit scores are improved. Most of these bills are usually smaller amounts. Hence their gradual settlement helps debtors to improve the credit scores enough to get a lower interest debt consolidation plan. Utility bills can also be consolidated in debt consolidation loans.

Reducing the bill amount on utility bills

During the period of financial crisis it is always suggested to lower the amount of utility bills. This can be done simply from shifting to regular plans instead of premium ones. Saving electricity and cutting down on other costs can also help to reduce the total amount of the bill.