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While mobile bill payments do not directly affect your credit score, timely payments can promote credit. The unpaid bills sent for the collection can reduce your score.
Mobile bill payments on time do not affect the credit score directly.
When applying for a loan or credit card, your credit score – which is often referred to as a cibil score – plays an important role in determining your credibility. Banks and financial institutions closely evaluate this score to decide whether your loan or credit card application should be approved. While factors such as the use of credit cards and loan repayment are known to affect credit score, many wonder whether to pay mobile phone bills is a similar effect. Let’s break the connection between mobile bill payment and credit score.
Do mobile bills affect payment credit score?
In India, paying your mobile bill on time does not directly affect your credit score. Credit information companies such as CIBIL, Experian, Equifax, and CRIF high mark mainly focus on credit-related transactions-as when calculating loan repayment, credit card bill and credit use ratio-cost-credit score. Utility bills, including mobile phone payment, are usually not done in these calculations.
However, continuously paying your mobile bills on time can still contribute to your overall financial health by strengthening the responsible payment behavior. This indicates positively on your credit profile, even if it does not directly improve your credit score.
New credit scoring models can change it
New credit scoring models are being developed to give lenders a more comprehensive approach to a person’s financial behavior. The purpose of these models is to include utility bill payments, including mobile bills, in credit score calculation, especially for individuals without traditional credit history.
Such models are already in use in some countries, which help people with limited credit history to create credit profiles based on regular bill payment. However, in India, these models are still in the early stages of development and have not yet been widely adopted by financial institutions.
Risk of unpaid mobile bill
When paying your mobile bill on time, your credit will not promote score, the missing payment may hurt it. If a mobile service provider reports unpaid bills to a collection agency, the outstanding amount may appear on your credit report. This can negatively affect your score, making it difficult to secure a loan or credit card in the future.
Once a bill goes into a collection, it lasts for many years on your credit report, indicating the lenders that you may be a risky borrower. Therefore, it is necessary to treat mobile bill payment with the same importance of credit card or loan repayment.
