Credit cards, car loans, and personal loans all have the ability to affect your credit. In fact, the best way to build good credit is to make sure you make these bill payments on time every billing cycle.
But what about cell phone bills? Does your phone bill affect your credit score in Canada?
Key Points
- Cell phone bill payments may affect your credit score if you’re on a post-paid plan and your cell phone provider reports payments to the credit bureaus.
- You can use your cell phone bills to build good credit by making payments on time every billing cycle.
- You can check if you’re cell phone payments are reported to the credit bureaus by calling your cell phone provider or by checking your credit report.
Does Paying Your Phone Bill Build Credit In Canada?
Many cell phone companies in Canada report their customers’ payment activities to at least one of Canada’s two major credit bureaus, Equifax and TransUnion. That means your cell phone bills may end up on your credit report and potentially affect your credit scores.
Whether your credit score is impacted positively or negatively depends on how you manage these bills and whether they’re reported to the credit bureau.
| Note: Prepaid cell phone plans are not reported to the credit bureau; only post-paid plans can be reported. – Postpaid Cell Phone Plan. With a postpaid cell phone plan, you agree to make a payment at the end of each billing cycle. Essentially, you’re receiving the service on credit. As such, many cell phone providers often perform a credit check when you apply for a plan and report your payments to the credit bureau. – Prepaid Cell Phone Plan. With a prepaid cell phone plan, you’re paying for the service upfront. You’re not borrowing anything; you’re simply purchasing a service. Since you’re technically buying your plan upfront, no credit check is required to activate your account, and your bills won’t appear on your credit report. |
Which Cell Phone Companies Report Your Phone Bill Payments To The Credit Bureaus In Canada?
Here’s how some of the most popular cell phone companies in Canada operate when it comes to reporting your bill payments to Equifax and/or TransUnion
| Bell | Bell reserves the right to report your Bell credit history. |
| Rogers | Rogers reports their clients’ accounts to Equifax and TransUnion after each monthly billing cycle. |
| Fido | Fido reports their clients’ cell phone accounts to Equifax and TransUnion on a monthly basis. |
| Koodo | Koodo reports your entire payment history to both credit bureaus. |
| Telus | Telus reports your payment activity to both of Canada’s credit bureaus regularly |
Does Bell Report Cell Phone Payments To The Credit Bureaus?
Bell can choose to report your credit history to credit bureaus and collections agencies. They may also access your credit information from those same parties. This makes it easier for Bell to collect your payments.
Does Rogers Report Cell Phone Payments To The Credit Bureaus?
Rogers reports their clients’ accounts to Equifax and TransUnion after each monthly billing cycle. The process begins in the first month following the account’s activation and finishes when the account is deactivated and the final balance is paid.
Does Fido Report Cell Phone Payments To The Credit Bureaus?
Fido also reports their clients’ cell phone accounts to Equifax and TransUnion on a monthly basis. If you check your credit report, you’ll find the associated details in the “Trade Line” section of the file. Once again, delinquent activities, like late payments and outstanding debts, are the most likely to get reported.
Does Koodo Report Cell Phone Payments To The Credit Bureaus?
Koodo reports your entire payment history to both credit bureaus. So, on-time payments can help build good credit, but any missed payments may hurt your credit. Activating “pre-authorized payments” in your Koodo account can help you avoid these debt collection issues.
Does Telus Report Cell Phone Payments To The Credit Bureaus?
Telus reports your payment activity to both of Canada’s credit bureaus regularly. So, missed payments can hurt your credit.
How Does Your Phone Bill Help You Build Credit?
When it comes to building good credit, your cell phone bills can help in the following situations:
You Make Timely Payments
If your cell phone provider reports your payments to the credit bureaus, your timely payments will be recorded in your credit report. This will help you build a positive payment history, which may help improve your credit scores. Timely payments may also help you avoid late penalties and future debt collection problems, and provide an easy way to build a credit history if you don’t have one.
However, it’s important to remember that late and missed payments will also be reported, which can negatively impact your credit. So, be sure to make these payments on time.
Account Age
The longer you have an open account on your credit report, the more it can build your credit history. The age of your accounts can also impact your credit. Generally speaking, the longer you have an account open, the more positively it can impact your credit score.
| Note: If your cell phone provider does not report your payments, consider using your credit card to make your payments. You can earn points and build a positive payment history by paying your credit card bill. |
Can Unpaid Cell Phone Bills Hurt My Credit In Canada?
Failing to pay your cell phone bills on time could negatively affect your credit. However, it depends on the credit scoring model used to calculate your score and whether your cell phone provider reports the payment to the credit bureaus.
Credit Check
When you take out a cell phone plan, the provider may pull your credit report, which is referred to as a ‘hard inquiry’. When this happens, your credit score may take a slight hit, though this is usually temporary. Your score should bounce back up in the near future, as long as you continue to be responsible with all your bill payments.
Payment History
If your late payments are reported to the credit bureaus, it may negatively impact your credit scores. Your payment history generally accounts for around 35% of your credit scores, depending on the credit scoring model used.
While some may include your cell phone payments in their calculations, others will not. As such, the impact your cell phone payments will have on your credit scores depends not only on whether your cell phone providers report the payments, but also whether it’s included in the credit scoring model.
| Note: It’s important to remember that banks, lenders, and creditors have their own credit scoring models. They can choose which information they want to use when calculating your credit score. |
Debt Collection
If you miss paying multiple cell phone payments, your cell phone provider may send your account to collections. This can damage your credit, as delinquent accounts can stay on your credit report for up to 7 years, even after they’ve been paid.
| Are You Struggling To Make Your Cell Phone Bill Payments? If you’re struggling to keep up with your cell phone bill payments, it’s important to act early to protect your credit score. Here are a few tips to help you avoid missed payments: – Contact Your Provider Immediately: Don’t wait until your payment is overdue. Reach out to your cell phone company right away and ask about payment plans, bill extensions, or temporary relief options. – Avoid Resetting The Clock On Debt: In Ontario, the statute of limitations on phone debt is typically 2 years. If you make even one payment on an old outstanding debt, this can reset the clock and make you fully responsible for repayment again. Before paying old collection accounts, get legal advice. – Speak With A Credit Counsellor: If your debt is too much for you to manage on your own, reach out to a credit counsellor to get sound financial advice. |
Learn more: Do Unpaid Cell Phone Bills Go To Collections?
Strategies To Use Phone Bills For Credit Building
Here are a few practical strategies to use your cell phone bills to help build a strong credit score:
- Choose A Postpaid Plan: Opt for a postpaid plan — where you pay after using the service — with a cell phone provider that reports payment history to credit bureaus.
- Always Pay On Time: Payment history makes up 35% of your credit score, so it’s crucial that you make timely payments every billing cycle. Set up automatic payments or reminders to avoid late payments.
- Set Up Autopay: To ensure you don’t forget about a cell phone bill due date, consider setting up automatic payments.
- Monitor Your Credit Report: Request a free credit report from Equifax or TransUnion to check if your phone account is listed. This helps you track progress and spot errors that need attention.
- Don’t Cancel Contracts Without Settling Them First: Cancelling a phone contract without paying off outstanding balances can lead to negative marks on your credit report. If you have to cancel a cell phone contract, be sure to pay off any balances first.
Do Other Utility Bills Get Reported?
Since cell phone bills can be a tool to build credit, you may wonder whether other utility bills — like water, electricity, or internet — can do the same. Cell phone bills and other utility bills are treated differently when it comes to credit reporting and building your credit score. Here’s a breakdown of the differences:
| Cell Phone Bills | Other Utility Bills | |
| Reported to Credit Bureaus? | Typically, though it depends on the provider | Rarely |
| Positive Effect on Credit Score? | Yes, if on-time payments are made (though negative effects are possible with missed payments) | No; positive payments usually don’t appear on your credit report |
| Credit Check Required? | Often, especially for postpaid plans or device financing | Not typically, though new customers or those with no proven payment history may need to undergo a credit check |
Final Thoughts
Your timely cell phone bill payments can have a positive effect on your credit. This is particularly true if you have a postpaid plan, or you pay your bills with a credit card. No matter what type of bills you have on your plate, it’s important to pay them on time every billing cycle to keep your credit score healthy.
