Improving Your Credit Score: Using Verizon Cell Phone Service
21 July 2006This post is part of a series on how to improve your credit score. Part One dealt with the basics of what a credit score is, how it is calculated, and how you can request a credit report. Part Two gave advice on how to correct errors in your credit report, so that you can fix any problems that aren’t your fault. Part Three dealt with changing the way you pay your debts each month so that you make sure you always pay your bills on time – and minimize damage to your score if you don’t.
This post is a quickie, but has an important tip for people looking to build up your credit score: think about switching to Verizon for your cell phone service. Why would that make a difference? Most cell phone companies don’t report your monthly payments to the credit agencies. If you pay on time, you don’t get any benefit for it in your credit score – but if you don’t pay, you’ll still get a hit.
Verizon, however, has started reporting every month. If you pay on time, it goes on your credit report. They do this in nearly all the states Verizon is available in. This means that if you’ve always paid your cell phone bills on time, you can boost your credit score over time by using Verizon instead – because it will now be on record.
Who should do this? And who shouldn’t?
If you’re young and have no credit history, this is a great way to get started. If you’ve got a bad credit history, but have fixed your problems and are now paying everything on time, this is a good way to repair your credit.
You shouldn’t use Verizon from a credit score perspective, however, if you’re likely to miss a payment. This is the big downside to monthly reporting: people who miss payments or are late in making payments will now be on record. Before this decision to report monthly, you could get away with missing a payment or being late without it going on your score, as long as you paid it without waiting too long. Now, people who miss payments will actually lower their credit scores by using Verizon. That’s also a very good reason to keep the autopay option on – being late will hurt you.
To discuss this, visit the Free the Drones forums here.
2 Responses to “Improving Your Credit Score: Using Verizon Cell Phone Service”
July 24th, 2006 at 12:54 pm
[...] Improving Your Credit Score: Using Verizon Cell Phone Service Free the Drones sends in an interesting tip about improving your credit score by using services from companies that report on-time payments from month to month, eg: Verizon. This is one part of a longer series on credit. [...]
March 28th, 2007 at 6:03 am
I don’t get the point: if you miss payments you will eventually lower your credit score anyway. What’s so special about missing paymnets on Verizon bills?