Maintaining a good credit score is paramount on your journey to financial freedom. Loan or credit card lenders regularly report positive and negative payment activity to credit bureaus, and on-time payments account for about 35 percent of your FICO credit score.

But what about other bills? Does paying noncredit bills affect your credit score?

The answer to that question is less cut and dry. It ultimately depends on how you pay your bills. Typically, noncredit bills for rent, medical expenses or utilities don't affect your credit score in the short term like credit bills. Your landlord and utility provider doesn't report to credit bureaus. That means using a bill tracking app to pay everything on time won't positively impact your credit score or help you see improvements.

When Noncredit Bills Affect Your Credit

Unfortunately, paying noncredit bills on time won't boost your credit score. But that doesn't mean that you can start paying your bills late!

Bill providers will report severely late payments. That could cause your score to plummet. The ramifications will worsen if your bills get sent to collections.

Having any bill in collections will severely harm your credit score, and it can affect you for many years. Agencies report you to all three credit bureaus whenever they open a collections account. It's considered a derogatory mark on your credit file. The agency may also report repossessions, foreclosures or legal action taken to collect that debt.

The same goes if a bill provider closes your account and considers your debt uncollectible. You may breathe a sigh of relief after seeing a charge-off, but that event will cause your credit score to drop substantially.

What about Medical Bills?

A bill tracking app can help you stay on top of all your financial responsibilities. While on-time noncredit payments won't improve your score, the results of missed payments and collection efforts will certainly harm it.

Medical bills used to have the same effect. But as of 2022, things are different. Thanks to disputes and insurance issues, credit bureaus agreed to wait one year before medical debts in collections appear on your credit file.

Author Resource:-

Emily Clarke writes about cash advances, overdraft protection & finance apps. You can find her thoughts at bill tracking system blog.