Phone bills hit youth credit records

Bunbury teenagers and young adults are unwittingly ruining their credit records by defaulting on their mobile phone bills.

The Bendigo Bank has revealed the growing problem of Bunbury residents finding it difficult to get finance because of failing to pay for phone plans.

This comes as the bank completed its first outreach program at a Bunbury school last week.

Credit ratings were one of the major topics discussed during a number of lessons held at Bunbury Senior High School on Thursday and Friday.

Bendigo Bank branch manager Sherrie Morgan revealed one of the consequences of a lack of financial awareness among young people was the realisation they had bad credit ratings because of defaulting on bills, mostly on mobile phones.

“Mobile phone plans are one of the biggest things we see on a credit rating as a default,” she said.

“Because if they lose their mobile phone they think they don‘t pay the credit contract anymore.

“Even people with the best credit don’t realise the damage mobile phone plans can do their credit ratings if payments are not made.”

Bunbury Senior High School upper school student support officer Danelle Field said the growing use of mobile phones meant it was “a huge” issue for students.

“The kids have mobile phones but they have no understanding about credit ratings,” she said.

“They don‘t know how that can get them into trouble financially.”

The Consumer Credit Legal Service of WA principal solicitor Faith Cheok says she is aware of similar examples of bad credit ratings among young people across the State.

“These issues can have a high impact on people, ” she said.

“For example, they might be ready to buy a home or a car and they are prevented from doing so because their credit rating is not good.

“We would normally advise such a client to apply for a free copy of their credit report, in order to determine what the status of their credit worthiness is.”

Ms Cheok has also warned of the dangers of using services from some credit card repair companies because they have high fees for services that can be accessed for no cost.

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