If you pay an early termination fee (ETF) to get out of a cellphone contract, will it affect your credit?
An early termination fee was contemplated at the start of the contract, so therefore the cellular provider wrote a clause into your contract that allows consumers to exit their contracts by paying a lump-sum. This should not be considered a derogatory mark on a credit report because it is not an indication of a delinquent payment. You did not violate the terms of your contract. By paying an ETF on time you fulfilled the terms of your contract.
Most cell-phone companies do not report your monthly account activity to the credit bureaus, unless your account goes into collections. If that happens, it is very likely the collection account will hit your credit report and harm you score.
Should a US cellular provider report an early termination where you pay the early termination fee as a derogatory item, dispute the listing.
On a related note, read Cheap Cell Phone Service to learn how to cut your monthly cell phone bill.
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