NMLS# 3151

Thursday, May 23, 2013

Cell phone bills and how they may or may not affect your credit

If you're anything like me, your cell phone bill is probably on your list of "necessary" monthly expenses.

The ability to talk, text, and surf the web with a remote device becomes more important to us than being able to afford a healthy diet or save extra money for emergencies.

However, the difference between a cell phone bill and other bills such as your monthly mortgage or car payment is that depending on how you pay your bill for your cell phone you could either be hurting your credit or not affecting it at all.  Read below to find out the difference between helping or harming your credit score when it comes to paying your cell phone bill:

What Will Hurt Your Credit Score

Like any other bill you owe, if you fail to make a payment or become delinquent on your account, you can potentially damage your credit score.  Not only will your service most likely get shut off for missing a payment, but each 30, 60, and 90 day late take a massive hit on your credit score.   After 30 days, your cell phone carrier will report your missing payment to the credit bureaus who could then turn it over to a collections agency.  Because late payments and collection accounts report for seven years, time is the only factor that can help improve your scores again.

The best move, pay your bills on time.  Otherwise you might find your cell phone turned off and your credit score hurting.

What Won't Affect Your Credit Score

So it only makes sense that if you miss a payment it hurts your credit score so if you make a payment on time it will actually help your credit score, right? Wrong.

Unfortunately, a cell phone bill is not a line of credit so the credit bureaus have no way to tie your history of on time payments to your credit.  If you are paying by cash, check, or having it automatically deducted form your account it will not affect your score.

What Could Help Your Score

Charging your cell phone to a credit card and then paying it off is one way to build credit.  If you don't have enough credit to qualify for a credit card, or simply don't want to worry about the hassle, the best alternative is to help build your credit score is to get a secured credit card.  A secured credit card is similar to a debit card in that the amount you charge is limited to the amount of money you put on the card.  It's a great way to build credit while only spending within your means.  Either way will help build your scores, just remember to use it responsibly.


No matter how you pay your cell phone bill just remember to pay it on time to avoid any late fees, extra charges, and any harm to your credit score.  If you have any other credit questions feel free to email them to jaymiet@ranlife.com

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