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Until recently, utility bills could only affect your credit if you didn’t pay them on time. (All the while months or even years of on-time payments didn’t do a thing to help you build credit.) Well, that’s all about to change. Your utility bills might finally be able to boost your credit.

Utility Bills and Credit: Punitive No More

One may think that a company reporting payment information to a credit reporting agency (CRA) would report all payments.

But credit reports have traditionally tracked only credit usage, so it makes sense that utility bills would be excluded. After all, they aren’t traditional credit products like credit cards and loans. VantageScore®, competitor to the popular credit score FICO®, noted years ago that “traditional credit scoring does not consider rent and utility payments.” Even FICO® points it out, saying that “your good history of rental and utilities payments are not listed on your credit report.”

That logic falls apart, though, when your payment history is reported only when it’s negative. Why should the payment history on these bills not be considered relevant to your credit reports when you’re doing well with payments, but suddenly relevant when you’re not? It almost makes the relationship between your utility bills and your credit reports seem punitive.

Credit reporting agency Experian is seeking to change that concept with a new product called Experian Boost™.

Utility Bills Soon Will Help Your Credit

Though not officially launched yet, the goal of Experian Boost™ is to help consumers who don’t have a credit history build a positive one through on-time payments of utility and telecom bills. What’s more, those who sign up for this product also will get to see one of their credit scores for free — and be able to track their score progress over time.

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Here’s how it works: Typically, the information on your credit reports is populated from data provided by your lenders. (One example of this is whether you made your payment that month and whether it was made on time.) This type of reporting would imply that, for Experian Boost™ to work, your utilities providers would have to send these updates to Experian.

But that’s not the case. According to The New York Times, Experian will partner with a company called Finicity to “scan bank statements and identify eligible payments.” In other words, for this to work, you would need to have a bank account that can be accessed online, and you would need to grant access to it when you sign up for Experian Boost™.

If the thought of that makes you nervous, note that The New York Times went on to report that “The system uses read-only access, so it cannot alter a user’s data.” Therefore, Experian can read the account information on the bank account you provide access to in order to extract payment history, but it likely can’t do anything to the account.

Will It Work for You?

So, what kind of impact can the reporting of your utility bill payment history have on your Experian credit report? To find out, The Times spoke with Experian’s consumer bureau chief product officer Gregory Wright. Here’s what he said:

“Experian found that adding the additional bill-payment information helps increase a user’s credit score about two-thirds of the time … In about a third of the cases, it has no impact. (Rarely, the extra information may lower a score slightly; in that case, a consumer could just cancel access to the service.)”

To see an improvement in two-thirds of participants’ credit scores sounds like a pretty good track record. But the paper points out one more caveat to consider: There are three major credit reporting agencies, not just one. And if the lender you want to work with goes to one of the other two (Equifax or TransUnion) for your score, they won’t see the score you built via Experian Boost™.

That said, using a free product to boost one of your credit scores might be worth it, even if the other major CRAs don’t show the same improvement. If you’re interested in finding out for yourself, you can sign up for updates on the launch of Experian Boost™ here.

Find out everything you need to know about credit scores and credit reports.