
How your mobile phone can help to improve your credit score
Advertisement
Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.
When you take out a mobile phone contract, this will show on your credit report. If you manage your phone contract well and make your payments on time, then a mobile phone contract is a good way to help improve your credit score. However, if you miss a payment, your mobile contract provider will inform the UK credit reference agencies of this and your credit score could be reduced.
Mobile phone contracts are not covered by The Consumer Credit Act and this means that mobile phone providers can decide when they want to report an account as in default at their discretion. There is no requirement to have a set period for arrears and a Default Notice does not need to be served either.
If you miss a mobile phone payment and your mobile phone provider reports this as a default, it can appear on your credit report for up to six years. This may impact your ability to get other credit during this time.
Taking out a mobile phone contract usually involves making an initial payment and then a regular monthly payment covering the cost of using the mobile network and to repay the cost of the handsets. This can be considered a form of credit as you are making payments after using the service. For this reason, mobile phone providers require you to pass a credit check before they will give you a contract. Usually being approved for a mobile phone contract is easier than other forms of credit, but if the provider is not happy with your credit score, they may refuse you a contract altogether or place restrictions on your usage.
Here are some reasons to check your credit score before applying for a mobile phone contract.
You can check your credit report using a credit check service.
LOQBOX helps to grow your credit score while you save. Decide what you could save in a year. They lock away a 0% loan for that amount in your LOQBOX. You pay off the loan over 12 months, growing your credit score as you go to unlock better borrowing. Once your loan is repaid, you release every penny into a new bank account for free. Or into an existing account for £30.
Weekend Moneyfacts is available free by email to all Moneyfacts.co.uk users.
Send me Weekend Moneyfacts, Savers Friend and selected third-party offers.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
When comparing two insurance policies, one of the first things to look for is the quoted premium. Below we have explained what an insurance premium is, how it is calculated and taxed.
When comparing two insurance policies, one of the first things to look for is the quoted premium.
Who are the best travel insurance providers? We've reviewed hundreds of products to find those that deserve the top marks of five-stars.
Who are the best travel insurance providers? We've reviewed hundreds of products to find those that deserve the top marks of five-stars.
Thinking of getting a new car insurance quote? You may be wondering how it impacts your credit score. This guide will tell you everything you need to know.
Thinking of getting a new car insurance quote? You may be wondering how it impacts your credit score. This guide will tell you everything you need to know.
COVID-19 can affect your holiday in more ways than you may realise. For example, if you are infected with COVID-19 before you go on holiday and are forced to cancel your plans, you could lose thousands of pounds if you are uninsured.
COVID-19 can affect your holiday in more ways than you may realise.
When comparing two insurance policies, one of the first things to look for is the quoted premium. Below we have explained what an insurance premium is, how it is calculated and taxed.
When comparing two insurance policies, one of the first things to look for is the quoted premium.
Who are the best travel insurance providers? We've reviewed hundreds of products to find those that deserve the top marks of five-stars.
Who are the best travel insurance providers? We've reviewed hundreds of products to find those that deserve the top marks of five-stars.
Thinking of getting a new car insurance quote? You may be wondering how it impacts your credit score. This guide will tell you everything you need to know.
Thinking of getting a new car insurance quote? You may be wondering how it impacts your credit score. This guide will tell you everything you need to know.
COVID-19 can affect your holiday in more ways than you may realise. For example, if you are infected with COVID-19 before you go on holiday and are forced to cancel your plans, you could lose thousands of pounds if you are uninsured.
COVID-19 can affect your holiday in more ways than you may realise.
Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.
I accept. Read our Cookie Policy