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Do Cell Phone Bills Affect Your Credit Score?

Janine DeVault

Jul 13, 2021 5 min read

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How cell phone bills impact your credit score
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    Whether you’re working to build or improve your credit score, establishing a history of on-time bill payments goes a long way.

    Your cell phone bill is an excellent place to start.

    Paying your cell phone bill on time each month can help build a solid payment history, which is the biggest factor that affects your credit score. Cell phone companies report your monthly bill payments to credit bureaus, and that information is added to your credit file. If you make payments on-time, this positive information will be added to your credit report and could help you improve your credit score. However, if you miss payments, this could be added as negative information to your credit report, which will ultimately hurt your score.

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    Sign up for Borrowell to get your credit score AND credit report for free. You can easily download your Equifax credit report and see what information is impacting your credit score, including your cell phone payments. You'll also get tips on how to improve your credit score. Sign up in under 3 minutes, with no credit card required.

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    Below, we’ll dig into some of the nuances of how your cell phone bill can affect your credit score for better or worse.

    Will Missed Payments on my Cell Phone Bills Hurt My Credit Score?

    Generally speaking, missing a payment of any kind has the potential to harm your credit score, either directly or indirectly.

    Any time you fail to make an on-time payment, you risk having your debt sent to collections. Late payments and delinquent accounts (those left unpaid for a significant period) will both appear on your credit report and harm your credit score. 

    This holds true for cell phone bills as well.

    If you skip paying your cell phone bill for a month or two and then catch up, the late payments will be reflected on your credit report. Since your payment history accounts for 35% of your overall credit score, it’s crucial to make on-time payments to keep your score healthy.

    While an occasional late payment here or there isn’t likely to cause severe damage, an ongoing trend of late payments will be detrimental to your credit score. 

    If you neglect to pay your phone bill for a prolonged period, your mobile provider may send your account to collections. At this point, the account will appear on your credit report as delinquent. 

    Delinquencies are very damaging to your credit profile. When an account is sent to collections, it will remain on your credit report for six years from the date of your final payment. This can act as a red flag when you try applying for financial products from other lenders.

    With this in mind, always make your payments on time to avoid having accounts sent to collections.

    A note on prepaid phone plans

    If you have a prepaid phone plan, you can miss a payment without risking damage to your credit score. With prepaid accounts, you only have access to the service if you pay in advance. This way, the service provider is protected from clients who fail to pay. 

    If you neglect to pay your prepaid phone bill, the mobile service provider will suspend your service. The mobile service provider won’t report your failure to pay to credit bureaus because it is not a debt. You simply lose access to the service. 

    Does Paying My Cell Phone Bill Help Me Build Credit?

    Paying your cell phone bill on time each month can help you build credit in a few different ways.

    While only post-paid mobile accounts are reported to credit bureaus, you can still work to build your credit even with a prepaid phone bill if you pay with a credit card.

    Paying your cell phone bill with a credit card each month is a strategic way to boost your credit score and establish a positive credit history if you stay on top of your cell phone bill and credit card payments.

    Setting up automatic cell phone payments using your credit card will ensure that you pay your mobile bill on time each month. This will establish a history of on-time payments for your mobile account. Some mobile companies even offer discounts for activating an auto-pay arrangement like this.

    At the same time, if you then make on-time payments on your credit card bill each month, you will establish a positive credit history for that account too. Now you have two accounts on your credit report with a history of on-time payments. This type of positive information helps you improve your credit score.

    While establishing a history of on-time payments is a crucial step in building your credit, remember that applying for a new cell phone account could result in a temporary ding to your credit score in the short term.

    Any time you apply for a new credit account, a lender will authorize a hard pull of your credit history. Hard credit pulls usually lead to a slight temporary dip in your credit score. As long as you don’t initiate too many hard credit pulls in a short time-frame, the drop in your score will likely resolve within a few months.

    If you’d rather avoid a drop in your credit score, purchase a prepaid phone plan. Credit checks aren’t required for these accounts, and you will still be able to boost your credit score if you make on-time payments using your credit card. This type of mobile plan is not reported to credit bureaus, so the only way to build your credit with a prepaid phone plan is by making on-time payments with your credit card.

    The Bottom Line

    Because payment history makes up such a large part of your credit score, you should always prioritize paying your accounts on time.

    Your cell phone bill may be a small amount compared to some of your other monthly payments, but missing payments or letting your account become delinquent can still be detrimental to your overall credit score.

    Setting up auto-pay through your credit card is a fantastic way to ensure you never miss a cell phone payment and continue to build a positive credit history. Just be sure to pay your credit card bill on time too! 

    Janine DeVault
    Janine DeVault

    Janine is a writer who focuses on topics such as credit education, money management, and renting best practices for tenants and landlords. Janine loves to travel and has lived in Canada, the US, and Mexico.

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