Does a phone bill build credit?

Paying a phone bill does not build credit in most cases, as payments usually aren’t reported to the credit bureaus, which means they won’t go on your credit report or affect your credit score. However, paying phone bills can build credit if you use a bill reporting service. Companies such as WalletHub and Experian Boost can report your cellphone payments to the credit bureaus, along with other utility bills, helping you build credit.

The biggest factor affecting your credit score is your payment history. When you report consistent, on-time cellphone payments to at least one of the credit bureaus, you can build up your credit score and show lenders you are capable of managing your financial obligations.

If you don’t have any credit history, VantageScore says it can generate your first credit score for you right away when you add your cellphone or other utility bills to your credit report. If you already have a credit score, you could increase it by up to 150 points, according to VantageScore.

How to Build Credit With Your Cellphone Bill

Pay Your Cellphone Bill With a Credit Card

Your cellphone payments usually aren’t reported to the credit bureaus, but your credit card payments are. By paying your cellphone bill with your credit card and then paying your credit card bill in full every month, you can build your credit. In addition, if you are using a rewards credit card, you can earn cash back, points, or miles. 

Finance a New Cellphone

If you decide to finance a new cellphone instead of paying for it in full upfront, the retailer or phone manufacturer may open a line of credit for you. When you make payments, the company will report them to the credit bureaus. On-time payments add positive information to your credit report and can help increase your credit score.

Report Monthly Cellphone Payments to the Credit Bureaus

You can decide to report your cellphone payments to the credit bureaus using a bill reporting company such as WalletHub or Self. These companies typically require you to pay an annual or monthly fee. Then, you’ll connect your bank account, allowing the company to verify your cellphone bills so it can report the payments to at least one of the credit bureaus, helping you build credit. Most bill reporting companies only report on-time payments, so you don’t have to worry about a late payment negatively impacting your credit score.

Benefits of Building Credit

When you use your cellphone bill to build credit, it can increase your credit score. A higher credit score may lead to:

• Higher approval odds for credit cards and loans
• Lower interest rates for credit cards and loans
• Better rewards on credit cards
• Increased odds of being approved for an apartment
• More job and dating prospects

Learn more about why it’s important to build credit.

Does Not Paying Your Cellphone Bill Hurt Your Credit?

Not paying your cellphone bill can hurt your credit if your phone provider sends your unpaid balance to collections. Collection accounts can drop your credit score by 100 points or more and can be listed on your credit report for seven years. This can reduce your chances of getting approved for a new credit card or loan.

Even though bill reporting services may not report late or missed payments, your cellphone provider can. That’s why it’s always a good idea to pay your bill on time.

To learn more, check out WalletHub’s guide on how to build credit.