Do Phone Companies Report to Credit Bureaus?

Phone companies operate differently from traditional lenders when reporting consumer payment information to credit bureaus. While practices vary, phone companies generally do not report positive, on-time payment history for monthly service plans. However, missed payments or accounts sent to collections are frequently reported, impacting a consumer’s credit standing. This distinction is important for understanding how phone service activity appears on your credit report.

Phone Companies and Credit Reporting

Phone companies typically do not report on-time monthly payments for postpaid services to the major credit bureaus. This is because phone service is generally considered a utility or service agreement, rather than a credit product like a loan or credit card. Consequently, consistent, timely payments for your phone bill may not automatically help in building a positive credit history.

In contrast, if payments are missed or an account becomes delinquent, phone companies are likely to report this negative information. Accounts unpaid for 30 to 90 days past due may be reported to credit bureaus or sent to collection agencies. This negative reporting can include details such as the date of delinquency, the amount owed, and the account status.

Postpaid phone plans are the primary type of phone service that can affect a credit report. When opening a new postpaid account, phone companies typically perform a credit check, often a hard inquiry, to assess creditworthiness. This inquiry can temporarily affect a credit score.

Prepaid phone services, paid in advance, generally do not involve credit checks or report payment activity to credit bureaus. Since no credit is extended, there is no risk of overdue balances to report, so these services do not impact credit scores. Some third-party services, however, allow consumers to opt-in to have their on-time phone payments reported to credit bureaus, potentially helping to build credit history.

Credit Bureaus and Phone Account Data

When phone companies report payment data, it is submitted to one or more of the three major nationwide credit bureaus: Experian, Equifax, and TransUnion. This data is incorporated into a consumer’s credit file.

A credit account listed on a credit report is called a tradeline. If a phone company reports an account directly, it appears as a tradeline detailing account status, payment history, and balance. However, phone account information more commonly appears on a credit report if the account is delinquent and sent to collections.

An unpaid phone bill sent to a collection agency appears on a credit report as a collection account. This entry shows the original creditor, the collection agency, the amount owed, and the date the account became delinquent. Collection accounts can remain on a credit report for up to seven years from the date of the first missed payment. While a collection account negatively influences a credit score, its impact lessens over time, especially if paid. The presence of such an entry signals to other potential creditors that there was a failure to meet a financial obligation.