Does having a mobile phone contract improve credit rating?

l.duffman

Hi,

Hope this is in the relevant place.

I am currently looking for ways to improve my credit rating. Does having a mobile phone contract(24 months) actually improve your credit rating?

If so how.

I know cos' they have to check your credit rating and it is a credit agreement, logically I assume it would improve your credit rating as if you didn't pay it would negatively impact it otherwise.

I actually asked in two phone shops and they said it did, but according to my friend it doesn't

If not how, as i'm a little confused about the whole credit rating thing.

Thanks in advance.

stephane_2

Simple answer yes it does...its like a credit agreement, it will show if you can stick to it over a period of time and most importantly show that you are making your monthly payment on time and never, ever miss one. Catalogue account also can help your credit rating.

l.duffman

stephane wrote: »

Simple answer yes it does...its like a credit agreement, it will show if you can stick to it over a period of time and most importantly show that you are making your monthly payment on time and never, ever miss one. Catalogue account also can help your credit rating.

Hi

Thanks for the reply I thought it would. But my mate said he phoned up Experian and he said that they said that it doesn't actually improve your credit?

OK a catalogue might be an idea to do then aswell.

I also have a captial one card that's a credit builder.

Any other ways to help build better credit. I know not to take on too much that I can't handle, or too much that might impact in any way other than positive.

rartherinv

Experian do not seem to have the foggiest idea about what lenders use to score applicants - and they make millions from selling credit scoring to people who assume they getting a valuable service shocking really that they can get away with a simple con on such a massive scale.

anyway, if you were considering lending three people you don't know some of your money, you looked at their credit report and:

- the first person has no phone contract (possible they are on pay as you go due to a bad relationship with credit, or possibly they are not part of society and don't require a mobile).
- the second person has a phone contract with late payments every other month or a phone contract in default.
- the third person has a phone contract with every bill paid on time for a number of years.

so who are you gonna lend to and did the different phone contract histories affect your decision at all?

Fiddlestick

Last time I queried an application with a lender then advised me that whilst they do take into account the running of mobile phone accounts, they put a lot more weight on revolving credit like overdrafts and credit cards.

Buzby

Experian is right. All a mobile contract does is show up as a single data line of how you paid the last years bills (and woe betide you if you foul up). It does nothing positive to prove your suitability for 'improvement'. A personal loan however, would as this is a genuine credit agreement. A mobile contact is NOT a credit agreement in any shape or form. So if you want improvement, take a loan, bu your handset SIM free and go PAYG.

rartherinv

Best ways to improve your credit are to make sure everything on your reports is Correct, let any Bad stuff drop off and show that you can Handle credit.

Correct - Name and address history? Electoral roll? Credit account info?

Bad stuff - Stop searching for credit and making footprints, under 3 searches in 6 months is OK. - Pay everything on time and wait for any poor payment history or defaults to drop off your report after 6 years.

You can Handle credit - Establish a flawless recent payment history. Get credit accounts going such as capital one, don't get too many accounts or too high a limit and do not use too much of the limits given. After a year or two lenders will see "CREDIT CARD - LIMIT £2000, OWED £100"... with a phone contract, catalogue or couple of other ongoing credit agreements this makes you a PRIME applicant. :T