How Your Cell Phone Can Keep You From Getting the Lowest Mortgage Rate

Despite what you may have heard, your cell phone payment history does affect your credit score.

Cell phone accounts work differently than a credit card or a line of credit. A cell phone is an open or “O” account, which means the balance has to be paid in full at the end of each month.

There is no such thing as a minimum payment with an “O” account like there is with credit cards and lines of credit. You can’t just pay a portion of your bill. The amount that you see on your statement has to be paid in full otherwise your credit score will suffer.

Unfortunately, many Canadians don’t view paying their cell phone bill in full or on time as being as important as other payments. Lenders disagree. The bank underwriters (the people who review your application) are thinking, “If you can’t make or keep track of a cell phone payment, what are the chances that you are going to be responsible with your mortgage payment?”

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