How Do Cell Phone Payments Affect Your Credit Score?

A person holding a smart phone with icons that include an hourglass, a credit card, and a calendar, illustrate a headline that reads: Cellphone Payments and Your Credit Scoreit score. Timely payment of your cellphone bill does not affect your credit score. Late payments, however, will negatively impact your score. One workaround is to use your credit card to pay your phone bill, which helps your credit score as long as you pay it on time

The Balance / Bailey Mariner

We pay a lot of bills every month. While some of them help our credit scores, there are others that don’t help them, even when they’re paid on time. Monthly cell phone payments fit into the latter category.

Why Timely Cell Phone Payments Don’t Help Your Credit Score

Cell phone providers usually don't report regular payments to the credit bureaus, even though they check your credit score to decide whether to approve you for a phone contract or an installment plan for a new phone. No matter how many times you make your cell phone payment on time, it won’t help your credit score, since the cell phone company is not reporting your on-time payments to the credit bureaus. It seems a little unfair that your credit is used to make a decision about a financial obligation that can’t help your credit.

Cell phone providers will also check your credit if you want to finance a new cell phone. Many cell phone carriers now require you to purchase or lease a new cell phone. Either way, you'll likely end up with an installment plan for your new phone with small monthly payments included with your monthly service fee.

When you're getting a new phone, the carrier will perform a credit check to determine whether you qualify for financing and under what terms. Even though you’re essentially being extended a loan to pay for your new phone, the payments won’t be directly reported to the credit bureaus and won’t help your credit score.

New Cell Phone Applications and Late Payments Can Hurt Your Score

The inquiries made to your credit history when you establish a new service or finance a cell phone can affect your credit. Credit inquiries are 10% of your credit score and affect your credit for 12 months. After 24 months, inquiries fall off your credit report completely.

While timely cell phone payments don’t help your credit score, late payments can hurt it. Just one or two late payments typically won’t hurt your credit, as long as you catch up on the past-due amount before your contract is terminated and your former carrier turns your account over to collections.

If you stop making cell phone payments, and your account is subsequently closed, the carrier may send your account to a collection agency for payment. The collection will be listed on your credit report and will severely hurt your credit score. You could also hurt your credit score if you terminate your contract prematurely or disconnect your services without completely paying the early termination fee or the balance remaining on your phone.

Once a delinquent cell phone balance is on your credit report, it will stay there for seven years like most other negative credit information. Your credit score will take the biggest hit in the first few years after the delinquency is added to your credit score, but your credit score can rebound with time if you make all of your other credit-related payments on time and avoid any future collections.

Possible Workarounds

Even though cell phone and utility payments are not directly reported to the credit bureaus, you can use a service like Experian Boost to monitor your checking account for on-time payments to utility and cell phone companies. You can add up to 24 months of payment history from the service providers of your choice to your credit history, potentially boosting your credit score.

Another workaround is to use a credit card to make your cell phone payments. Then, turn around and pay your credit card bill. The timely payments on your credit card will help boost your credit score.

Some credit cards even provide cell phone protection insurance if you pay your bill with your credit card. Check the terms of your credit card rewards program to see if this is the case for your credit card.

If you want to see which types of accounts are included in your credit report, you can order a free copy through

Frequently Asked Questions (FAQs)

What credit score do you need to qualify for a phone plan?

There isn't a minimum credit score required to get on a phone plan, but your options do get more limited as your credit score decreases. Those without good credit may need to pay a security deposit to sign up for certain plans. For those with particularly bad credit, the only options available may be prepaid phone plans.

Does financing a phone build credit?

Financing a phone may build credit, but it depends on the method of financing. A standard personal loan can build credit, as can putting the phone's cost on a credit card. A layaway ("buy now, pay later") program doesn't build credit. Keep in mind that late payments on any form of financing can hurt your credit score.

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