Do You Need Good Credit to Open a Cell Phone Plan?

With nearly 300 million cell phone users in the United States in 2021, it's only a matter of time until you'll find yourself shopping for a cell phone plan if you don't already have one. When shopping for most types of monthly services, businesses will pull your credit score. Although it won't affect your monthly fee amount, a low credit score could cause a company to deny you a monthly service entirely. Let's take a look at what cell phone companies like to see for credit.

When you shop for plans with cell phone companies, you have a few options to choose from. You can opt for a prepaid plan that requires a big chunk of cash down at the start of the plan. The pay-as-you-go plan is another option that requires a month-to-month contract. Finally, you can choose the postpaid or monthly payment plan. This last plan is the most common contract for shoppers.

If you have the ability to purchase a prepaid plan, most of the time, your credit won't be pulled. Cell phone businesses do not need to know how your credit history has been if you are paying in full in advance. It is one way to avoid that credit pull, but it can be a big investment.

​Read More:​ How to Check Minutes on an AT&T Prepaid Phone Card

When you don't want to commit to a two- or three-year contract with a company, the month-to-month option is an excellent choice. The flexibility of this type of contract makes it desirable for individuals. There is not usually a credit pull for this type of plan either because the business will terminate the plan if money isn't received each month.

With the monthly payment plan, you typically sign a contract for two or three years. This locks you into a rate with specific contractual agreements. When you apply for this type of plan, businesses may want to access your credit history. If your history is poor, they may deny you the contract.

Although most cell phone businesses do not have a tiered credit system in place, they do have certain standards. In most cases, they like to see a credit score of ​600 or higher​. If you are lower than that, they could potentially deny you a monthly payment plan and require that you pay in full upfront.

With some business transactions, the better your score is, the better the offer. In the case of cell phone companies, this likely doesn't apply. Even if you have the best credit score, you will get the same rates as someone with a lower score. In some rare cases, a business will deny you access to special promotions if your score is low, but that is not typical.

In 2020, Experian offered a program called Experian Boost. Through the program, individuals could have positive utility bills added to their Experian report in order to boost their credit score. This could be something to consider if you're thinking about shopping for plans. If you can add positive utility bills to boost your score, you can potentially have access to the best promotions for cell phone plans.

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