More than one in three Britons face credit refusal because of their mobile phone, according to research by a UK consumer credit reporting agency. Checkmyfile say that they analysed the credit files of 1000 consumers, taken at random, and found 36.6% of UK consumers had mobile phone accounts with missed payments. At worst these can lead to exclusion from the credit market or, at best, higher credit repayments because of hiked-up interest rates, arising from the increasing practice of lenders to 'price for risk'.
Barry Stamp, Joint Managing Director of checkmyfile.com, said he was shocked at just how many people had left themselves exposed to credit refusal in this way. "Missed payments on mobile phone accounts are much more serious than most people realise. We find that many people are surprised to discover that their mobile phone account appears on their credit file at all. Many of our customers find they have an unblemished credit file, except for their mobile phone account, which lowers their credit score and reduces the choice of credit products available to them."
Stamp explains, "Credit providers take a dim view of missed payments on applicant's credit files, as this can sometimes give an early warning of over-indebtedness. Most people have a missed payment on their credit files - we are all human - but a string of missed payments - which this study has shown is typical on mobile phone accounts - could easily lead to an application for credit being refused".
36% of Welsh consumers had mobile phone account missed payments, compared with 39% in Scotland, and 34% in England.
He added that mobile phone companies themselves take a much more hardline approach to missed payments on competitor telecom accounts than other credit providers such as card companies.
"We see much evidence of mobile phone companies declining applications for a new phone apparently because of a single missed payment on a competitor phone account. Often the remainder of the credit file is spotless. Most other credit grantors would take a considered view of the overall financial fortunes of an applicant, so some people are able to get credit with ease, but not a new mobile phone".
Stamp adds, "The solution is easy; consumers should arrange to pay their mobile phone accounts by direct debit to avoid the risk of missing any payments. Also, most people should check their credit files regularly and if there are any mistakes reported, consumers should challenge them immediately."
In Australia, credit reference agency Baycorp Advantage no longer registers telecoms accounts under $100, after it was revealed more than half a million Australians had been registered by telecoms companies as defaulters."
Posted to the site on 7th December 2006
Posted to: www.cellular-news.com/story/20826.php