Tuesday, 10 March 2015

How mobile bill payments affect your credit score?

Your cellphone/ telephone bills are one of your necessary monthly expenses. Most people don’t know this but not missing a bill payment or not paying your mobile bill doesn’t only cut off your network, there is another repercussion to it too. Like your other monthly expenses like mortgages and loans, not paying your mobile bill affects your credit score too.

So how exactly do your mobile bill payments affect your CIBIL score?

Like it usually happens with other bills, not paying off your mobile bill may damage your credit score. Most mobile networks would cut off your network if you fall behind on your payments. You may think that you only have an outstanding bill, nothing to worry about. But you wouldn’t even know and by the end of this you’ll be stuck with an outstanding bill as well a low credit score.

After cutting off your network they’ll most likely report your nonpayment dues to the credit bureaus and then turn your debts to the debt collections agencies. An account which makes itself to collections stays on your credit report for a good 7 years thereby harming your credit score more. So pay off your cellphone bills on time to save your credit report from any harm.

You may be thinking not paying a bill can negatively affect my credit score so does paying it improve the score? No it doesn't. Since your bill payments are paid by cash or from your bank account and also your mobile network company hasn't given you credit, your payments are not reported to the credit bureaus.

If you do want your regular bill payments to affect your credit score positively, then use a credit card to pay off your bills and if you can’t get a credit card, you could opt for a secured credit card. Whatever you charge on your credit card is limited to the amount you put on your card. And your credit card issuer will report your payments to the credit bureaus, and thus you can build your credit score with your mobile bill payments.

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