How does a mobile phone contract affect my credit score?

Last Modified 2nd of March 2021

Well first of all, getting a mobile phone contract does affect your credit rating a little bit. In fact you will probably have to have a credit check before you are able to take out your contract. Don’t worry though; the criteria for getting a mobile phone contract are certainly not as strict as, say, getting a personal loan.

Most people don’t realise this but when you have a phone on contract (even if it is just a sim only, monthly contract) you are in fact borrowing money.

This is how it works

You use your phone during the month, you use up your allowance (or not) and then maybe accrue another £5 worth of usage, through data, phone calls or texts. You won’t actually pay for this usage until the end of the month when you get your bill.

So for that reason, having a mobile phone contract and paying your bill on time each month will result in new information being added to your credit file, and that will eventually affect your credit score. Of course this also means that if you are late on a payment your credit file will be negatively affected.

How much impact does it have?

Well every little helps as they say, and having a contract for a long time will gradually add some good signals, but in reality having a long history with your phone company isn’t going to help you get a mortgage.

If you have very poor credit, then getting a mobile phone is often a good way to start building some history and may eventually help you to get other forms of credit, possibly even a credit card. Baby steps of course, but eventually you will get there. If this is something you’re considering, do find out more about what credit score you might need to be accepted for a mobile phone contract.