Will Financing a Smartphone Build Credit?

The short answer is probably not. For payments on a financed smartphone to impact your credit score, your creditor must report the loan to the major credit bureaus. Wireless carriers like Verizon, AT&T, and T-Mobile generally don't do this, so financing your phone through a carrier won't help.

If you finance your phone through a phone manufacturer like Apple or Google, the manufacturer might report activity to the credit bureaus if they treat the financing like a line of credit. In this case, making on-time payments will help you build your credit score.

The flip side is that getting approved for financing may involve a hard credit check, which could cause your credit score to decline. If you are late on payments or miss payments, your credit score could get dinged as well.

Long story short, financing a smartphone is generally not a good way to build your credit. There are also significant downsides to financing your phone, such as being locked into an overpriced wireless plan. By buying your smartphone outright and opting for a low-cost prepaid plan, you can easily save hundreds of dollars a year.

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