A default on a mobile phone, broadband or energy account is one of the most common types on UK credit files, often for a final bill left unpaid after switching provider or moving home. Some lenders may weigh a small, settled default of this kind more lightly than one on a loan or credit card, particularly if it happened some time ago and nothing else on the file is recent. That is not a rule every lender follows, though, and the amount and whether it is settled still matter.
This page looks at why these defaults happen so often, whether they are treated more leniently, what to do if the bill was wrong, and clearing one before you apply. See our main page on remortgaging with defaults for how defaults are recorded generally.
On this page
This page covers
- Credit issue
- DefaultsUsually stays on your credit file for 6 years from the default date.
- Amount
- Smaller amountsSome lenders treat low-value issues, such as a small utility default, differently from larger debts.
Read the main guide: Remortgaging with defaults on your credit file
In short
- Phone, broadband and energy defaults are often small, and frequently involve a final bill after switching provider.
- Some lenders may view a small, settled default of this kind more lightly, though there is no fixed rule.
- A disputed final bill can sometimes be challenged and corrected or removed.
- Settling a small default is often straightforward and can be worth doing before you apply.
Why do phone, broadband and energy defaults happen so often?
These defaults often come from a final bill rather than an ongoing problem. Switching mobile network, moving home without cancelling a broadband contract properly, or an early termination charge on a fixed-term deal can all leave a balance the account holder did not expect. If it goes unpaid, often simply because a final bill was not received or was overlooked, the provider can register a default in the usual way, normally after about 3 to 6 months.
| Situation | What often happens |
|---|---|
| Switching mobile or broadband provider | An early termination charge or final month’s bill is missed |
| Moving home | A final energy or broadband bill goes to the old address |
| Contract ends but equipment or a handset is still being paid off | The remaining balance is not settled in full |
| A billing dispute is not resolved before the account closes | The provider registers a default while the dispute is unresolved |
For illustration only. Every provider handles arrears and defaults differently.
Are these defaults treated more leniently?
Sometimes, but not always. Some lenders may give less weight to a small, settled default on a utility or communications account than to one on a loan or credit card, on the basis that it says less about how someone manages borrowing generally. Other lenders treat every default the same regardless of what it was for, and some set a value below which they disregard a settled default entirely.
Because there is no consistent rule, it is worth being upfront with an adviser about the amount, the provider and whether it is settled, rather than assuming it will automatically be overlooked. If you also have larger defaults on file, our page on multiple defaults explains how a mix of accounts may be weighed together.
What if the final bill was wrong or disputed?
A default is only supposed to be registered where the debt is genuinely owed and the account holder had a fair chance to pay or dispute it. If you queried a final bill, an early termination charge or an amount for a returned handset before the default was recorded, and the provider went ahead anyway, you may be able to challenge it.
- Gather any correspondence showing you disputed the bill before the default date
- Contact the provider directly and ask it to review the entry
- Escalate to the industry ombudsman relevant to the sector if the provider does not resolve it
- Ask the credit reference agency to place a notice of correction while a dispute is ongoing
A default that was correctly recorded, even for a small amount, still stays for 6 years from the default date. It can only be removed early if it was recorded in error.
Should you clear a small default before you apply?
Because these defaults are often small, they can be straightforward and inexpensive to settle. Paying it in full changes the status to satisfied and removes an outstanding balance from your file, which some lenders may view more favourably than an unpaid amount, however small.
If the debt has been sold to a collection agency, check who currently owns it before paying, and make sure any payment updates the correct account. Our page on defaults sold to a debt collector explains what to look out for. Once settled, see satisfied defaults for what changes and what to keep as proof.
What lenders may weigh with a phone or utility default
| Factor | Why it matters |
|---|---|
| Amount | Some lenders disregard small settled defaults below a certain value; others count every one. |
| Settled or unsatisfied | A settled small default is usually viewed more easily than one left unpaid. |
| Type of provider | Mobile, broadband and energy defaults are often viewed as consumer accounts rather than borrowing. |
| Age of the default | An older, settled utility default is usually easy to explain, particularly with nothing recent. |
| Other credit issues | A small default sits differently on a file with nothing else negative than on one with larger, more recent issues. |
| Mortgage payment history | Keeping your mortgage up to date matters regardless of how small other defaults were. |
| Loan to value and equity | More equity can widen the choice of lender, whatever the size of the default. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- The provider, amount and default date
- Whether the default has been settled, and any settlement letter
- Any correspondence if the bill was disputed
- Whether the debt was sold on and who currently owns it
- Your mortgage balance, deal end date and any early repayment charges
Frequently asked questions
Will a small phone bill default be ignored by every lender?
No. Some lenders may give less weight to a small, settled default of this kind, but it is not a universal rule. It is best to be open about it and let an adviser check how a particular lender is likely to view it.
Can I get a default removed if I never received the final bill?
Possibly, if you can show the bill genuinely never reached you and you had no fair opportunity to pay or dispute it. Raise it with the provider first, and escalate to the relevant ombudsman if it is not resolved. A correctly recorded default cannot be removed just because it is inconvenient.
Does it matter which company the phone or utility default was with?
Not usually by name, since lenders do not treat one provider differently from another. What tends to matter is the amount, whether it is settled and how it compares with anything else on your file.
Is it worth paying off a small default just before I apply?
Often yes, if you can do so easily. It changes the status to satisfied and removes an outstanding balance, which some lenders may view more favourably, even for a small amount.