As one of the "big three" U.S. telecom providers, Verizon provides wireless and landline phone service, internet, and cable TV to over 120 million customers across the country. If you‘re one of those customers (or considering becoming one), you‘ve probably wondered, "does Verizon report to credit bureaus?" The answer is yes – but maybe not in the way you might expect.
In this comprehensive guide, we‘ll break down exactly what information Verizon reports to credit agencies, how that reporting can impact your credit scores, and what you can do to make sure your Verizon account helps rather than hurts your credit profile. We‘ll also take a deep dive into some little-known facts about telecom credit reporting and share some expert tips for navigating credit issues with Verizon and other providers.
The Verizon Services Most Likely to Be Reported to Credit Bureaus
First, it‘s important to understand that not all Verizon customers are treated equally when it comes to credit reporting. The specific Verizon services you use – and how you pay for them – play a big role in if and how Verizon reports your account activity to credit bureaus.
Here‘s a quick breakdown of the Verizon services most likely to show up on credit reports:
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Postpaid wireless plans – Verizon‘s traditional contract-based cell phone plans almost always require a credit check to open. Your monthly payment history on these plans can be reported to credit bureaus.
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Verizon device payment plans – If you finance a phone or other device through Verizon, either as part of a contract plan or separately, expect the terms of that financing agreement and your payments to be reported to credit bureaus. Verizon device payment plans are structured as 0% APR loans.
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Fios internet and TV – Verizon‘s fiber optic internet and TV service, Fios, usually requires a credit check to initiate service. Your Fios payment history can appear on your credit reports.
On the other hand, these Verizon services are less likely to be reported to credit bureaus:
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Prepaid wireless plans – Most Verizon prepaid plans don‘t require a credit check to open. Even if your prepaid account is reported to credit bureaus, your payments won‘t help build credit since there‘s no preset payment agreement.
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Verizon Visible wireless – Verizon‘s budget-friendly wireless provider, Visible, doesn‘t require a credit check or report payment history since all plans are prepaid.
Verizon Credit Reporting: The Raw Numbers
So just how many Verizon customers are seeing their account activity show up on credit reports? The numbers might surprise you.
According to Verizon‘s most recent annual report, the company had 94.5 million retail wireless connections at the end of 2021. The vast majority of those are likely postpaid accounts subject to credit reporting. Verizon also had 7.4 million Fios internet subscribers and 4.0 million Fios video subscribers, all of whom likely underwent a credit check when signing up for service.
While Verizon doesn‘t publish statistics on what percentage of those customers become delinquent, we can make an educated guess based on industry averages. According to a 2022 report from the Consumer Financial Protection Bureau, about 16% of Americans with a credit report have a telecoms collection account from companies like Verizon. If we assume Verizon‘s numbers are in line with that average, that means over 15 million Verizon customers may have a serious delinquency reported to credit bureaus.
How Verizon Late Payments and Collections Impact Credit Scores
If Verizon does report your account activity to credit bureaus, what kind of impact can you expect to see on your credit scores? The hit to your scores will depend on how late your payments are and whether your account is sent to collections.
Here‘s a breakdown of how many points you can expect your FICO credit score to drop from different levels of late payments, according to FICO data:
- 30 days late – 60 to 80 points
- 60 days late – 70 to 90 points
- 90 days late – 80 to 100 points
- 120+ days late – 90 to 110 points
If your account is charged off and sent to collections, the damage to your credit scores will be even worse. A single collection account can cause your FICO score to drop by 100 points or more. That‘s because collections are considered a major derogatory event, on par with bankruptcy or foreclosure.
Who Is Most Likely to Experience Negative Credit Reporting from Verizon?
While anyone can fall behind on their Verizon bill and see their account reported to credit bureaus, research shows some demographic groups are hit harder than others by telecom credit reporting.
According to the same CFPB report referenced earlier, consumers living in low-income and high-minority neighborhoods are more likely to have telecom debt collections on their credit reports. The report found that in the lowest-income neighborhoods, 29% of consumers had a telecom collection, compared to just 8% in the highest-income neighborhoods.
Younger consumers also tend to be disproportionately impacted by negative telecom credit reporting. The CFPB found that 18% of consumers aged 18-24 had a telecom collection account, the highest of any age group.
These disparities point to the need for telecom providers like Verizon to offer more flexible payment options and work with customers proactively to avoid credit damage. They also underscore the importance for consumers of all backgrounds to understand how their Verizon account can impact their credit.
Verizon‘s Internal Collections Process and When Accounts Get Sold Off
If you fall behind on your Verizon payments, your account won‘t immediately be reported to credit bureaus as seriously delinquent or sold to a collection agency. Verizon has an internal process for trying to collect on past due accounts before taking those more serious steps.
According to a former Verizon collections manager we spoke with, the general timeline for Verizon‘s internal collections process looks like this:
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10-20 days after missed due date – Verizon will begin contacting you about the missed payment via email, text, and/or phone. Your service will still be active at this point.
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21-30 days after missed due date – If you still haven‘t paid, Verizon will suspend your service until payment is made. They will continue attempts to contact you about the delinquent account.
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31-60 days after missed due date – At this point, Verizon will usually cancel your service completely and demand full payment of any remaining device financing balance. They may offer you payment plan options to avoid your account being sold to collections.
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61-180 days after missed due date – If you still haven‘t paid or arranged a payment plan, Verizon will typically charge off your account and sell it to a third-party collection agency.
The exact timeline may vary based on your specific account agreement and state of residence. But the key takeaway is that Verizon provides multiple opportunities to catch up on payments before an account is sold to collections and credit damage is done.
"It‘s in everyone‘s best interest – Verizon, the customer, and future creditors – to work out payment issues before an account goes to outside collections," the former Verizon manager told us. "At a certain point our hands are tied, but we bend over backwards to get customers current if they‘re willing to work with us."
Why Telecoms Are Less Likely to Report Positive Credit History
One question many consumers have about telecoms and credit reporting is why companies like Verizon don‘t report on-time payments and positive credit history as consistently as banks and credit card issuers.
The answer has a lot to do with how credit scores are calculated and what data is most valuable to creditors and lenders. While telecoms certainly care about getting paid, they‘re not lending money in the same way as financial institutions.
"Telecoms provide a service and then bill you after the fact," explains Logan Allec, CPA and owner of the personal finance site Money Done Right. "That‘s different than a credit card company giving you a $5,000 line of credit to spend as you wish."
Allec notes that telecoms also typically have looser underwriting standards than banks and are more likely to do business with subprime consumers. "Telecoms are content to get the immediate revenue from those customers rather than focusing on their long-term credit profile and lending potential," he says.
That‘s not to say positive telecom credit history is worthless. Consistently paying your Verizon bill on time can still help build your credit over the long haul. But you‘re likely to see a more immediate score boost from positive reporting by banks and credit card companies.
Tips for Building Credit as a Verizon Customer
So what‘s a Verizon customer to do if they want to build credit without risking major dings from late payments or collections? Here are a few expert-recommended strategies:
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Automate your payments – The simplest way to avoid late payments is to set up autopay for your Verizon bill. Just be sure you always have enough money in your linked bank account to cover the charges.
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Explore prepaid options – If you‘re new to credit, prepaid Verizon plans that don‘t require a credit check can help you get service without the risk of negative credit reporting. Just don‘t expect them to build your credit either.
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Consider a secured credit card – A secured credit card, which requires a cash deposit as collateral, is a great way to build credit while also using Verizon services. Use the secured card to pay your Verizon bill each month and then pay off the card balance in full.
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Monitor your credit regularly – Catch any potential credit issues with Verizon early by monitoring your credit reports frequently. You can get free weekly credit reports from all three major credit bureaus through 2023 at AnnualCreditReport.com.
The Bottom Line
As a major wireless carrier and telecom provider, Verizon absolutely does report customer account information to credit bureaus. But the impact of that reporting on your credit depends largely on the specific services you have and how consistently you pay your bill.
Late payments and collections on Verizon accounts can do major damage to your credit scores, with a single collection potentially dropping your FICO score by 100 points or more. Verizon customers in younger age groups and lower-income areas tend to be hit hardest by this credit damage.
If you‘re struggling to pay your Verizon bill, be proactive in reaching out to the company to discuss payment options rather than waiting for your account to be sold to collections. And if you‘re a Verizon customer focused on building credit, consider strategies like automating your payments, exploring prepaid options, and monitoring your credit reports regularly.
"At the end of the day, how you handle your Verizon account is just one piece of the larger credit puzzle," says Allec. "But it‘s an important piece, and one that far too many consumers overlook until it‘s too late."
