Credit cards, car loans, and personal loans all have the ability to affect our credit, but did you know that your cell phone bill can also affect your credit?
Many cell phone companies in Canada report their customers’ payment activities to at least one of Canada’s two major credit bureaus; Equifax and/or TransUnion. That means your cell phone bills are likely to end up on your credit report and potentially affect your credit scores.
In fact, your cell phone bills may help build credit when:
If your cell phone provider reports your payments to one or both 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. However, it’s important to remember that late and missed payments will also be reported which can negatively impact your credit.
Timely payments will also help you avoid late penalties and future debt collection problems. It’s also an easy way to build a credit history if you don’t have one.
You can also build your payment history by paying your cell phone bill through your credit card. Credit card companies typically report to one or both credit bureaus. This is a good option if your cell phone provider does not report your payments to the credit bureaus. Just be sure to pay your bills in full when possible. While partial and minimum payments can stop late fees, the added debt can affect your debt-to-credit ratio which may negatively impact your credit.
Failing to pay your cell phone bills on time (particularly multiple bills) could affect your credit, however, it depends on the credit scoring model and whether your cell phone provider reports the payment to the credit bureaus.
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. So late or missed cell phone payments could negatively affect your credit.
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 scores. 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 if your cell phone providers report the payments, but whether it’s included in the credit scoring model.
If you miss paying multiple cell phone payments, your cell phone provider may send your account to collections. This can negatively impact your damage as delinquent accounts can stay on your credit report for up to 7 years, even after they’ve been paid.
Not all cell phone plans are reported to the credit bureaus. In general, prepaid cell phone plans have no impact on your credit while postpaid plans can impact your credit. It’s important to understand the difference and choose the one that best suits your needs.
Similar to a prepaid credit card, a prepaid cell phone plan allows you to load cash directly onto your account or buy “top-up” cards to pay your monthly bills. Since you’re technically buying your plan upfront, you don’t have to do a credit check when activating your account and your bills won’t appear on your credit report.
If you forget to load money onto your account, it will have no effect on your credit. You simply are able to use your cell phone until the funds have been used up.
Otherwise known as service contracts, postpaid plans are what most Canadian cell phone users have. Rather than depositing money in your account upfront, you agree to make monthly payments, typically by credit card (although other payment forms may be possible). Most cellphone providers will perform a credit check when you apply for a plan.
Depending on the cell phone providers, the postpaid cell phone payments may show up on your credit report which may affect your credit scores. To avoid any missed payments, setting up automatic payments is always a good idea.
When buying a postpaid cell phone plan, it’s safe to assume that your provider will perform a credit check and report your payment information to at least one of Canada’s credit bureaus. That said, they aren’t guaranteed to report every one of your cell phone bills. Primarily, they’ll report your late payments and other delinquent behaviour.
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 reserves the right to report your Bell credit history to credit bureaus, lenders, collections agencies and other Bell Company businesses (including Bell Media and The Source). When initiating your cell phone plan, they’re also allowed to retrieve your credit details from those same parties. This makes it easier for Bell to collect your payments.
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. The information that Rogers normally reports to the credit bureaus includes:
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.
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 should help you avoid these debt collection issues.
Like most major cell phone providers, Telus reports your payment activity to both of Canada’s credit bureaus periodically.
All cell phone companies have slightly different ways of reporting their customers’ accounts to Canada’s credit bureaus. However, there are several pieces of common personal information that every provider sends, including but not limited to:
Cell Phone Bill FAQs
Do prepaid cell phones build credit?
Prepaid cell phone bills don’t usually build credit because phone providers don’t report them to either credit bureau because you’re already paying for the service and no actual credit is being extended. How do I know my cell phone provider is reporting my payments?
Not all cell phone providers report your cell phone bill payments to the credit bureaus. If you can’t get this information from your provider, you can see a detailed history of your credit usage by requesting a copy of your credit report from both bureaus. Can my cell phone bill affect my credit?
Yes, a cell phone bill can affect your credit in positive and negative ways. For instance, when a cell provider reports your good bill payments to either of the credit bureaus, they can build your credit history which may raise your credit scores. Then again, this also means late and missed payments may hurt your credit. Late payments can not only hurt your credit scores, but most negative activity also stays on your credit report for years.
As long as you’re good at paying your debts on time, your monthly cell phone bills can have a positive effect on your credit. This is particularly true if you’re paying your bills with a credit card. However, as mentioned above, the impact of your cell phone payments ultimately depends on the credit scoring model used and whether your payments are reported to the credit bureaus. Nonetheless, you should always speak with your cell provider for all the information you need and read your potential contract carefully before you sign it.
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Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.
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