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The short answer is no, paying your cell phone bill typically doesn’t directly build credit. This is because most cell phone providers don’t report your payment history to credit bureaus. However, there are a few ways you can leverage your cell phone bill to boost your credit score
How Cell Phone Bills Can Hurt Your Credit
While paying your cell phone bill on time won’t directly improve your credit score, missing payments can negatively impact it. If you fall behind on your payments, your cell phone provider may report this delinquency to credit bureaus, which can lower your score. This negative information can remain on your credit report for up to seven years, although its impact diminishes over time as you build a more positive credit history.
Here are some situations that can negatively impact your credit score:
- Missing payments: Even a single missed payment can be reported to credit bureaus and hurt your score.
- Late payments: Consistently making late payments can also damage your credit score.
- Defaulting on your contract: If you end your contract early without paying off the balance, your account may be sent to collections, further damaging your credit score.
How to Use Your Cell Phone Bill to Build Credit
Even though your cell phone payments aren’t automatically reported to credit bureaus, there are ways to get credit for your on-time payments:
1 Use a Third-Party Service:
Several companies specialize in reporting your payment history for bills that aren’t typically included in credit reports, such as cell phone bills, utilities, and rent. These services submit your payment history to the three major credit bureaus, potentially boosting your credit score. However, these services may charge fees for their services.
2. Utilize Experian Boost:
Experian Boost is a free service offered by Experian that allows you to add your cell phone bill (and other regular payments) to your credit report. Your on-time payments are then factored into your credit score, and your late payments are not included (though if you default on payments and your account is sent to collections, you’ll still take a hit).
Experian Boost is especially beneficial for consumers with little credit history who are looking for alternative methods to build credit. You can also remove accounts from reporting at any point if you feel they are not helping your score.
3. Pay Your Cell Phone Bill with a Credit Card:
While your cell phone provider may not report payments to credit bureaus, you can achieve recognition for your timely payments by paying with a credit card. Charging your cell phone bill to your credit card and then paying off your card balance in full and on time each month will help you build a solid payment history, benefiting from your cell phone account.
Additionally, depending on the card you use, you may also earn rewards for cell phone payments or benefit from cell phone protection insurance.
While paying your cell phone bill typically doesn’t directly build credit, you can take advantage of alternative methods to leverage your on-time payments and boost your credit score. By utilizing third-party services, Experian Boost, or paying your cell phone bill with a credit card, you can turn your monthly expense into a credit-building opportunity. Remember, a good credit score is essential for accessing loans, credit cards, and other financial products at favorable terms. Building good credit habits now can benefit you throughout your financial journey.
Here are some additional tips for building credit:
- Pay your bills on time, every time. This is the most important factor in your credit score.
- Keep your credit utilization low. This means using only a small portion of your available credit.
- Don’t apply for too much credit at once. Every time you apply for credit, a hard inquiry is placed on your credit report, which can lower your score.
- Become an authorized user on a credit card with good credit history. This can help you build credit without having to open a new account.
- Dispute any errors on your credit report. This can help improve your credit score.
By following these tips, you can build a strong credit history and improve your financial standing.
Opening a new account can affect your credit score
For the purpose of determining your eligibility for financing and the details of the plan, your cellphone provider will probably run a credit check. Your credit score may temporarily suffer as a result of this credit check, but hard inquiries account for very little of your score and disappear entirely after 24 months. The financing plan offered by your cellphone provider functions similarly to a loan, but it is not recorded with credit bureaus and does not raise your credit score in the same way that other loans might.
Improve your credit score using your cellphone bill
There are ways to add your good payment history to your credit report even though your cellphone payment isn’t automatically included.
Does a Cell Phone build Credit (or get you DECLINED)?
FAQ
Does cell phone payments build credit?
What bills build credit?
Does financing an Iphone affect your credit?
Can you build your credit score with a phone contract?
Can cell phone bills help build credit?
There are also a couple of ways that you can get your phone bills to help with building credit. These include: • Reporting payments to the bureaus through a third party: Cell phone companies usually don’t report directly to the credit bureaus, nor can you self-report your cell phone bill payments to the bureaus.
Does paying a phone company build credit?
Faithfully paying the phone company, month in and month out, doesn’t help you build credit because phone companies don’t typically report to credit bureaus. Even financing your phone or leasing it via a phone contract won’t build credit, since the companies don’t report the activity.
Do cell phone financing options help you build credit?
Not all cell phone financing options help you build credit. That’s because not all companies that provide financing will report your payment activity to the major credit bureaus. As such, that information won’t get added to your credit report. That being said, there are ways that financing a phone can help you build or establish credit.
Do cellphone bills affect your credit?
Typically, cellphone providers don’t report your payments to the bureaus — though newer services like Experian Boost can help you manually add your cellphone account. Unfortunately, it’s easier for your cellphone bill to negatively impact your credit because missed payments do get reported to the credit bureaus.