Missed mobile payments could cost you the home of your dreams

Mobile phone users are unwittingly putting their chances of getting credit, including mortgages, at risk by paying their mobile phone bills late or missing payments altogether, according to a survey on behalf of mortgages and loans broker OceanFinance.co.uk.
 
The research shows that 14% of people with mobile phone contracts have missed or made a payment late, with those in the 18 to 24 age group the most likely to suffer problems (23%).
 
Mobile contract users in London (25%) and the North East (24%) are more likely to run into difficulties with their bills than people elsewhere in the UK.
 
Most people blamed late payment or failure to pay on the unexpected size of the bill: 12% because of call charges; a similar number (12%) because of overseas roaming charges; and 25% because of excess data usage.
 
A further 35% said that other costs had caused them to run short of cash that month, indicating that some people are prioritising other payments over mobile phone bills.
 
However, mobile phone contracts are a form of unsecured credit, and having as little as one late payment in the last 12 months can dramatically affect your chances of getting a loan or credit card.
 
Ian Williams of Ocean Finance says: “Many people don’t realise that a mobile phone contract is unsecured credit and that they could be jeopardising their credit records by not paying.
 
“A common situation is that people take their phone on holiday abroad, rack up a large bill and then either can’t or won’t pay.”
 
A dispute about charges with a mobile phone company can take several months - but mobile phone companies are less tolerant than other lenders and will declare a customer in default after just three missed payments. In contrast a credit card company will allow six missed payments before declaring a customer in default.
 
Williams says: “When you are applying for credit, including mortgages, lenders will look at any late or missed payments from within the last three years, but the impact of any defaulted payments lasts for six years. So a default on a mobile phone bill from five years ago could still be stopping you from getting a loan, new credit card or, in a worst case scenario, a mortgage, regardless of how good your credit record is otherwise.”