Unlike credit card companies, banks & lenders – service providers such as cellular phones, cable, internet service providers, rental agencies and utility companies do not report to the credit bureaus how you make your payments.
So, if you thought that having a cellular phone or paying an electricity bill on time builds good credit for you – you’ve been misinformed. All of these services are not considered an extension of credit, and as such they do not appear on your credit report.
That doesn’t mean that you can stop making payments. Not only you will be charged with late fees and risk having the service closed, but once the service provider closes your account he will probably sell your debt to a collection company.
Almost all collection companies report to the 3 major credit bureaus, and when they buy a debt – they report it.
Once a collection account appears on your credit report, your score will go down by 60 – 150 points!
See How To Pay-Off Debt for tips on dealing with collection accounts.