The other day, we concluded the amount of home loan you can get with a 650 credit score caps at up to $1,054,000. While a mortgage is relatively different from device financing, can you lease the latest iPhone 14 or Galaxy S22 with similar points? If not, what credit score do you need to qualify for a cell phone from carriers or even lease-to-own stores?
In truth, many of us can’t survive without a cell phone today. In a recent mobile phone ownership survey, Pew Research Center has concluded that 97% of Americans have a “cellphone of some kind”.
Though these statistics may be hard to prove, they’re possibly true considering many now know about the free touch screen government phones.
In any case, this guide covers everything to know about the credit score you need to qualify for a cell phone payment program. It includes the various carriers and lease-to-own companies with this program, plus the credit bureau and points they prefer.
Wait! What Does Your Current Credit Score Mean?
What’s your current credit history? A lot of people don’t pay attention to their credit history until they have been denied a loan due to a low score. But in reality, you should keep track of your credit history.
Even as a student, it’s great to start building your financial health early. Some lenders consider a thin credit file (zero histories) as risky as the ones with a poor score. So, make use of the student or second chance credit card and watch your credit report grow in no time.
It’s pretty easy to access your credit report now almost everything has moved online. And to make it better, the three major credit reporting companies in the country (Experian, Equifax, and TransUnion) offer a copy of the report for free every 12 months.
Once you’ve received your credit report (it takes a few minutes after request), see where you rank against the score index. FICO Score is the most common credit scoring model for lenders, whereby we have a good score at 670 points and the poorest at 300. See below.
Chart 1: Standard FICO scoring model with major Credit Bureaus
|Credit Score (w/ FICO Scoring Model)||Points Rating||Credit Risk Level||Americans Registered|
|800 – 850||Exceptional (exceptionally good)||Low Risk||21%|
|740 – 799||Very Good (above average)||Very Dependable||25%|
|670 – 739||Good (average)||Dependable||21%|
|580 – 669||Fair (slightly below average)||Less Risk||17%|
|300 – 579||Poor (well below average)||High Risk||16%|
Chart 1.1: Standard Vantage scoring model with the major Credit Bureaus
|Credit Score (Vantage Scoring Model)||Points Rating||Credit Risk Level||Americans Registered|
|781 – 850||Excellent (excellently good)||Low Risk||23%|
|661 – 780||Good (above average)||Dependable||38%|
|601 – 660||Fair (slightly below average)||Lower Risk||13%|
|500 – 600||Poor (above average)||Slightly High Risk||21%|
|300 – 499||Very Poor (well below average)||High Risk||5%|
Note: The FICO Score is the standard credit scoring model that lenders widely use here in the United States since 1989. But some may decide to go with the VantageScore, a model that our three credit rating agencies came up with in 2006.
Yes! Your Credit Score Matter to Qualify for a Cell Phone?
When looking to replace or upgrade to a new phone, purchasing upfront is usually the best option. Not only do you get to pay a slightly less amount, but also you’ll never have to worry about late installments.
Sadly, the current pricing of phones is twice to five times what we used to pay years back. A perfect example is the iPhone 14 series costing up to $1099 and the Galaxy S22 Ultra with a $1,199 tag.
If you are to purchase either smartphone upfront, you should be earning at least four or five grand a month. Otherwise, a device payment program will be easier, whereby you can have the phone for as low as $45 over 24 months.
But just like applying for a credit card, say Chase Freedom Unlimited or Chase Freedom Flex, the phone dealer will want to know your creditworthiness before financing.
The dealer in question can be either the carrier you’re using or shop now and pay later catalogues like Amazon and Walmart. Then creditworthiness is where the phone dealer will check to see how likely you’re to pay off your bills.
Any type of lender loves to deal with a responsible borrower. And for that, a stellar credit score is what you need to qualify for cell phone financing with much ease.
If the score is beyond good (700 points and above), you could receive a credit limit of up $7,000 instantly. But when the lender performs a credit check, they will see the score points, amount of debt currently owed, payment history, and any charged-off or collections accounts.
So, a credit score of 700+ points could also afford you a cell phone financing of only $2,000.
No! You Can Still Qualify for a Cell Phone with Bad Credit
At the time of writing, approximately 67% of Americans had a credit score of at least 670 points- a good rating in the eyes of any lender. The 33%, which is still a huge gap, falls on what the lenders call bad credit from the poor credit score.
Sadly, any form of “bad credit” is less appealing in the eyes of a lender. It doesn’t matter whether you have a dicey report or you’ve just started to build yours. A low score is about the same- risky obligation, to them (lenders).
Nonetheless, this necessarily doesn’t mean you’re still not worthy to deal with. Like our case here, you can still get approved for a cell phone with bad credit in many financing programs. The dealer will check you have a stable income and a consistent employment record. Then they may (not always) ask for a security deposit or down payment.
The amount of deposit you’re to put down usually varies with the lender and your current credit file. For instance, Verizon often asks you to put down around $ $150 to $400, whereas AT&T and T Mobile can be up to $1,000.
Don’t worry, the security deposit is refundable after clearing your loan on the device. For Verizon, where the leasing contract is 24-36 months, you can actually get your deposit after one year of consistent payments.
If you don’t want to pay a deposit, various prepaid carriers have free cell phones no credit check no deposit-required deals. Then we also have the lifeline companies where you can get free cell phone and service without paying anything.
Now, What Credit Score Do You Need To Qualify For a Cell Phone Today?
Technically, there’s no a standard credit score to qualify for a cell phone. Each dealer has different requirements, including varying credit score points, to approve a leasing request.
Regardless, anyone with a “Dependable” credit risk level (a score of 670 and above) will qualify for phone financing without a hassle. The phone dealer will even allow you to finance multiple high-end iPhone or Android devices with no down payment.
Furthermore, an excellent credit score will give you access to early upgrade privileges, including Verizon iPhone deals for existing customers.
But even with a fair credit rating of 500s to 600s, Verizon can also approve you for a device payment with no down payment. I’ve seen some in community forums say they got approved without a deposit with a score below 500.
In the case of T-Mobile, the carrier isn’t the most friendly with the device payment program. Yes, many with an excellent credit history qualify for a cell phone with no down payment. But others in the same segment have had to pay a deposit of some sort (the company excuses with account age).
The following is a summary of cellular providers and dealers you can qualify for cell phone financing. It includes their preferred credit bureau to run the check, credit score, and deposit amount.
Chart 2.0: 14 Best Dealers You Can Qualify for a Cell Phone Financing
|Carriers & Dealers with Device Payment Plans||Financing Company||Preferred Credit Report Bureau||Down Payment Required|
|Verizon Wireless||Verizon Company||Equifax (500+ credit score)||$0 – $1000|
|AT&T||AT&T Company||Equifax (600+ credit score)||$0 – $1000|
|T-Mobile||T-Mobile Company||TransUnion (600+ credit score)||$0 – $1000|
|Apple Dealership||Citizen One Bank||Equifax (640+ credit score)||10-30% (of Total Cost)|
|Samsung Dealership||Affirm||Experian (640+ credit score)||10-50% (of Total Cost)|
|Google Fi||Synchrony Bank||Experian (600+ credit score)||$0|
|Xfinity Mobile||Fair||Equifax (600+ credit score)||$0 – $700+|
|Visible||Affirm||Experian (640+ credit score)||10-50% (of Total Cost)|
|Mint Mobile||Affirm||Experian (640+ credit score)||10-50% (of Total Cost)|
|Walmart Retail Store||Affirm||Experian (640+ credit score)||10-50% (of Total Cost)|
|Amazon.com Store||–||N/A (no credit check)||20% (of Total Cost)|
|Affirm Company||Cross River Bank||Experian (640+ credit score)||10-50% (of Total Cost)|
|Klarna Company||WebBank||TransUnion (no minimum score)||25% (of Total Cost)|
|Afterpay Company||Westpac Bank||Equifax (no minimum score)||0 – 25% (of Total Cost)|
Tip: Most lenders will use all the credit reporting agencies (Experian, Equifax, and TransUnion) to determine your creditworthiness. The “preferred” credit bureau is what the leasing company often uses in its operations.
Stop! Pay Your Bills on Time
In conclusion, the credit score you need to qualify for a cell phone depends on two main things: your credit file and the leasing company.
It’s easy to assume Verizon has the strictest credit requirement considering the service is usually the most expensive. But in reality, the carrier has the friendliest device payment plan as you can qualify with a rating below 600 without even a down payment.
Once the carrier or any of the other leasing companies approves your financing request, remember to be on time with all the payments. While they usually don’t report your on-time bills to the credit agencies, they do for late payments. And when that happens severally, it could end up hurting your report for a couple of months.