If you pay the penalty fee for canceling a cell phone contract does it still affect your credit rating?

Question

i'm 18 and i'm a co-signer on my cell phone. my dad is the primary owner. i was thinking about taking my name off the contract and then having him shut it off. then i would open up another contract only in my name. i need an answer to my question and any advice!!!

Answer 1

As long as you have not made any late payments, cancelling the phone contract and paying the early withdrawl fee will have no effect on your or your father's credit rating.  I have done it a few times and have an excellent credit rating.  Not paying and late payments may have an effect, but not gracefully bowing out and exhibiting responsibility will not.  

I do warn you that you may not be able to open an unsecured cell phone contract on your own at 18.  I tried and they told me they needed an $800 deposit because I did not have a credit history.  Usually it takes about a year and a half for an 18 year old to build the neccessary credit.  I opened a credit card at 18 and eighteen months later I was able to open a phone account on my own.  I think the best way to build credit at a young age would be to open a credit card, use it sparingly, and make payments on time.  In no time you should have built enough credit to sign for cell phone contracts, car loans, and even education loans without a co-signer.  

Hope this was helpful :)

Answer 2

not at all but technically on a cell phone acct a co-signer doesnt exist your name maybe on the acct for access but thats abt it. if you are going to stay with the same company cancelling may not be necessary normally they can just do a change of ownership which will require a credit report be pulled up for just you then you would go through the deposit process if needed depending on your credit score and normally this does not restart your current contract if you just change the phone to your name only way your credit is affected would be if the bill does not get paid at all after normally 90-120 days and it goes to collections

Answer 3

or he could take himself off and see if you can take over the contract...no penalty fees there =)...but no it does not affect your credit either way =) Have fun!

Answer 4

no

this is sparta

no credit!

Answer 5

Cell phones don't report to the credit bureaus.  The only time a cell phone debt will show up on your credit report is when unpaid accounts are turned over to collection agencies.

It is rather foolish for pay a termination fee just so you can try to get a contract in your name alone.  First, see if you can just take over the current contract in your name alone.  I suspect you will have to have a very large deposit.

Answer 6

I think if you take care of that matter and not let it default by not paying it, that it shouldn't go to the collection agency and it shouldn't be reported as negative.  Just check with your cell phone providers credit department and ask them these questions.