Building Credit With Your Cell Phone in Canada: Here’s Everything To Know

Pretty much all of us have a cell phone, but does making monthly payments count towards your credit score?

One big difference between the US and Canada is that your cell phone bill payments are often reported on your Canadian credit reports. That means paying your phone bill on time or financing a new phone purchase can help you grow your credit score.

But not all cell phone companies report payments — and some only report to specific credit bureaus. Here’s everything you need to know about building credit with your cell phone.

Does financing a phone affect your credit?

Yes, financing a phone can help you build credit in Canada. Many cell phone providers report your payment history to one or both of the Canadian credit bureaus, Equifax and TransUnion. If you’re not sure if your cell phone bill is being reported, you can request a free copy of your credit report online to find out.

If your company does report payments, then financing a phone through them should also be reported on your credit report. However, if you finance through a third-party website it may not hit your credit profile. Alternatively, if you use a credit card to finance a new cell phone purchase, this data will be reported to the credit bureaus.

How financing a cell phone builds your credit

When you finance a phone, you’ll receive a payment plan with a minimum payment due each month. In Canada, on-time payments make up 35% of your credit score, so as long as you pay your bills on time, your score should improve.

However, if you miss a payment, pay late, or don’t pay the full minimum amount, this could also be reported to the credit bureaus — and it could damage your credit score. Setting up automatic payments is a good way to ensure you always pay on time.

Will paying my phone bill build credit?

Yes, if your phone carrier reports to a credit bureau, your payment history can help build your credit. Since your monthly bill is often reported on your credit report, similar to financing a phone, making on-time monthly payments will also help grow your score.

If your cell phone company does not report to the credit bureau, or if you want to add another method for building credit, consider paying your bill with a credit card. Credit card payments are always reflected on your credit report, so making full, on-time payments can help elevate your credit score. Some credit cards also come with cell phone insurance and other protection. Just make sure you also pay your credit card bill on-time, otherwise your score might begin to drop.

Other methods for building credit

In addition to building your credit by paying your cell phone on time, there are other ways to get started on your credit-building journey. Credit cards are an easy way to start growing your credit. If you have a low credit score, consider starting out with a secured credit card or check out one of KOHO’s credit-building options.

You can also have your rent payments reported on your credit report, though you’ll typically pay a fee to set this up. You can sign up for Rent Advantage through Borrowell for $8 a month, or with FrontLobby, offered by Landlord Credit Bureau’s credit reporting service, for $5 per month.

A credit-builder loan is another option you can explore if your credit score doesn't allow you to qualify for most credit cards. Most credit unions offer this option, and as long as you make regular, on-time payments, your score will grow and you’ll receive the funds you’ve paid toward the end of your loan term.