Questions About Your Credit Score

Do Cell Phone Payments Effect Credit Scores?

Strictly speaking it does. As a general rule, not by much. But there are exceptions. Below are a few scenarios that should prove useful.

Does My Cell Phone provider Report My Defaults?

Here is the thing, technically speaking, creditors can report any default to the credit bureaus. But this is not always the case. A credit bureau can choose to include the information or not. Even if the information is not found on your credit score, it does not mean that the same is not considered. Remember, you may know the broad strokes of how credit bureaus make their computations, as well as the 5 main categories for consideration. But in large part, you have no idea about the details. Bottom line is, better not take the chance.

Questions About Your Credit ScoreScenario 1: One Time Default

A one-time default may not cause so much irritation that your cellular phone provider will report the same. This is especially true if the amount is negligible. The problem is, if the amount is substantial. In this case it would be better to contact your cell phone provider and reach an accommodation regarding payment.

Scenario 2: Credit Card

If your cell phone payment is tied up with your credit card, and you fail to pay the credit card company on time, then you can be sure that the default will be reported. Remember, a credit card is convenient, provided you are paying on time and in full. The problem starts when you default on payment and/or pay the minimum.

Scenario 3: Repeat Defaults

Repeated defaults on your part will may force your account to be reported to the credit bureaus. To put things in perspective, it does not mean that the same will be considered. Even if it does, there isn’t going to be much weight placed on a few cell phone defaults, especially if they are isolated cases. The problem occurs when your credit card default is on top of other defaults.

How to Check?

Aside from defaulting and looking at your report, which is a bad idea, you can try to contact your lender. Ask if they report the defaults or what circumstances warrants the default information being reported.

How to Avoid?

The simple answer is to pay your bills on time and in full. Below are a few suggestions that can be helpful:

  • Auto Debit: Most bank accounts allow the consumer to auto debit the payments monthly. Of course you want to check regularly to see that your payments are not becoming too steep.
  • Pay a few days in advance. You will be surprised at just how many times a consumer defaults because he/she forgot! You can prevent this by having a payment calendar.
  • Get a prepaid account. If you continually default on your cell phone bills, you might consider converting to a prepaid account. This way even if you default, the same does not get reported. You do however lose the ability to make calls, sms, tweets, etc, until you reload.