Often a rejection for a mobile phone contract is the first indication to someone that their credit score and mobile phones are linked. What most people don't realise is that a mobile phone contract is infact a credit agreement, and as such is applied for and considered in the same way a credit card application would be - with the same implications for your credit score.

After living overseas for a number of years I returned to the UK, got a job with a nice regular income and applied for a mobile phone contract only to be denied. Surprised - and wondering if it was because I wanted the phone delivered to my new house, not my parents address where my card was still registered - I then tried 3 other online phone retailers, plus applying directly with the networks before I gave up and bought a pay as you go phone.

It was only three months later, as I sat in the bank applying for a savings account and was told that I had been declined as the computer 'suspected I was a fraud' that I realised each one of those applications and subsequent rejections had been recorded in my credit report, and would remain there for years to come.

The rejections were likely the result of a combination of factors - my patchy address history, the fact I had not yet registered on the electoral roll (a major issue and something you should rectify immediately if you have not already done so) and one or two other missing pieces of information. Had I realised, these issues could have been corrected, however these applications and subsequent denials have tarred my account and will remain on file for years to come.

Now I am much wiser and working towards repairing my own score; but the fact remains - mobile phone contracts are credit agreements, and should be treated with the same degree of care.

It is not just applications that are important - missed payments, late payments and unpaid accounts are all serious issues that can severely affect your credit rating. Even an unpaid bill of 26p could considerably affect your score; it is not the amount left unpaid but that fact you didn't pay it that is important, so ensure you are organised and pay your bills on time.

You should always set up a direct debit to pay your mobile phone bills off each month, and take the same care when applying for phones as you would with any other financial application.

The flip side of this, of course, is that if you already have a mobile phone contract then paying regularly can help you build a positive credit rating, and the longer you remain a good customer the better your credit history will appear.