In today’s economy, having credit extended is more difficult than ever. When a company extends credit to its customers, it is crucial to the business to know how this customer handles their bills historically and to determine if this customer is low or high risk to their business. Carriers want to prevent you from racking up a huge bill and not paying it off. To this end, many major cell phone companies will check your credit before selling you a plan to evaluate your financial responsibility and ability to pay each month. If you have bad or no credit history, you may have to jump through some extra hoops, but there are still ways to get a cell phone plan.
- Understand why credit checks are done. Credit checks are used to assist a company in determining how a potential customer has handled their finances in the past. Most large companies have a credit department that will verify the information provided using your social security number, name, address, etc. through a credit reporting agency.
- Pay a security deposit. Many carriers allow people with no credit history to get a cell phone plan if they pay a deposit first. Deposit amounts will vary based on the carrier and your credit score, Most deposits range from $150.00 to $1,000.00 per line. Most carriers will refund your deposit after a year if you’ve paid your bill regularly and on time.
- Get a co-signer. Similar to getting a loan with no credit, you can get a cell phone plan with no credit if you have a co-signer to vouch for your trustworthiness. Just make sure your co-signer has a good credit score, or you won’t get approved for the plan. If you fail to pay your phone bill, your co-signer will be held responsible.
- Become an authorized user. Some credit card companies will allow someone, such as your spouse or parent, to authorize you to use their card. The other party would be obligated to pay off the charges, but your credit score will benefit from on-time payments and credit history just as much as theirs. On the other hand, if the other person doesn’t use their credit responsibly, your credit will take a hit as well. This option doesn’t allow you to immediately establish good standing with the cell phone company, but it could help you develop good credit relatively quickly.