How Your Cell Phone Impacts Your Credit

As you may know, credit reporting agencies collect all the data on your loans, lines of credit and credit cards to create your credit report and calculate your credit score.

This information is then used by lenders—including mortgage lenders—to determine whether you’re a good credit risk.

What many people don’t realize is that cellphone bill payments can also have an effect on credit rating.

Actually, this shouldn’t be a surprise, since before signing you up in the first place, your cellphone provider checked your credit report to see if you had a good history of paying your bills on time.

Now that you have your cellphone, it’s essential to keep paying those bills on time!

If you miss a payment or get behind, your cellphone provider will pass this information on to the credit reporting agencies, which can result in a lower credit score.

Even worse, if your account is sent to a collection agency, that information can stay on your credit report for up to seven years.

This matters because mortgage lenders use credit information to make underwriting decisions.

Therefore, having a negative record with your cellphone provider can actually impact your likelihood of being approved for a loan and increase the interest rate you’ll pay.

For more information on how to improve your credit rating, call us today!

 

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