Importance Of Your Credit Score
Credit scores are important because they are used to determine whether someone will be given a loan, accepted for an insurance policy, offered an apartment, hired for a job, or allowed to rent an apartment. They also affect interest rates on loans and mortgage rates.
So, why do cellular phone services use credit ratings? Simple, they want to know that you will pay the bill if they grant you service. They also want to know that you will continue to make payments on a phone if they advance you one. With cell phones now costing well over 1200 dollars a piece, this is increasingly important to carriers.
Score Needed For Verizon, AT&T or T-Mobile
Now that you can understand the importance of your credit score, let’s look at what the minimum score requirement would be for the major carriers.
Keep in mind that credit rating is just one of the factors used by carriers like Verizon, T-Mobile and AT&T. They will also use your job history and debt to income ration, among other things. Combined, all of these stats will give them a picture of your credit so that they can determine whether or not you can pay for your plan. With all that being said, if you have a score greater than 600 and stable work history, you should be able to qualify for service.
Qualify for service is one thing, but it dos not mean that you will qualify for every promotion. Many of the carriers will offer specials such as free phone deals or even special rate plans. These may be only available to consumers that they deem excellent credit risks.
What If Your Credit Is Too Low?
So, what happens if you do not have at least a 600 credit score? You still need a phone, which means that you will have to look at the alternatives. Here are some possibilities.
Pay A High Deposit
Your first option is to pay an inflated deposit to get an approval. A deposit will generally range from 100 to 400 dollars and will be returned to you with good payment history. In most cases, if you make 12 months pf payments on time, you will get your deposit back.
Get On A Parents Plan
If you are young, getting on a parents plan is another good option. You can simply pay the “add a line” price and be on your way. Enjoy the good credit of your parents and a low cost cellular phone bill.
Use An Alternate Provider
One of the best options if you have a credit score that is too low is to turn to an alternate cellular provider such as Cricket. These services have a number of benefits and use the same cellular towers that the big carriers are using. In fact, many of the alternate providers are owned by the big companies like Verizon, T-Mobile and AT&T.
The only real difference to an alternate provider is that you pay for the service at the beginning of the month instead of the end of the month. In addition, phones are typically not subsidized, but this is offset by the much lower monthly plan rates.
Improve Your Credit In 3 Steps
Now that we have answered questions about the minimum credit score for Verizon, T-Mobile and AT&T, let’s work on that credit. As you know by now, your credit score affects more than just your ability to get a loan, so why not get it on the road to recovery. This might seem difficult, but credit really is not a mystery and most of the score is based on just a few factors.
Paying Bills On Time
This is the biggest factor that will be used to determine your score, so it is one that you should pay close attention to.
It can be challenging to pay your bills on time, especially when you are running low on cash. However, there are a few things that you can do to make it easier for yourself. Pay your bills in advance by setting up a budget and sticking to it. Also, set up automatic payments from your bank account so that you don’t have to worry about forgetting the due dates.
You want to automate the process of bill paying as much as possible, so that nothing slips through the cracks. Try to set aside a day at the beginning of the month and a day at the middle of the month to review and pay your bills.
Responsible Use Of Credit Cards
Credit cards have been the ruin of many a credit score. This is because they are easy to charge up and have a big impact on your score. Roughly 30 percent of your score is based on how much of your credit you are using.
It is important to keep a close eye on your credit card usage. Credit cards can be very helpful in emergencies and for paying for flights, hotels, and other expenses. But this convenience comes at a cost. They are so easy to use that they get charged up quickly, before you even realize it.
This is a problem because anything over 10 percent usage is hurting your score. The more you go above 10 percent credit utilization, the more your score will drop, so be careful.
Age Of Credit
Your credit score will be impacted by both the age of your oldest account and the average age of your credit. This is why it is important to start building your credit early and to maintain older accounts.
Where people generally get in trouble with this factor is by closing paid off accounts. They pay off a credit card and then close it to keep from charging it back up. If the account was an older one, this will lower their age of credit and will cause a credit score drop. So, hang on to those old accounts whenever possible.