As a picky shopper and consumer expert, I know how important it is to understand a company‘s credit policies before signing up for service. This is especially true for major financial commitments like a cell phone plan. Verizon Wireless, one of the nation‘s largest and most popular carriers, does indeed run a credit check on most new customers. But what exactly does this process entail, and how might it affect you? In this comprehensive guide, I‘ll break down everything you need to know about Verizon‘s credit check policies, from why they do it to how to navigate the process with your financial goals in mind.
Why Verizon Checks Credit
First, let‘s discuss why Verizon and other mobile carriers check credit in the first place. According to a Verizon spokesperson, "We use credit checks to help us determine deposit amounts and eligibility for device financing. This is a standard practice across the industry to ensure we can provide service to as many customers as possible while still managing risk."
In other words, Verizon wants to make sure that new customers will be able to pay their bills on time each month. By reviewing your credit history and score, they can get a sense of your likelihood to default on payments. This helps them decide whether to require a security deposit and how much that deposit should be.
Verizon also uses credit checks to prevent fraud and protect their bottom line. With identity theft and financial scams on the rise, verifying a customer‘s credit can help weed out bad actors before they can rack up charges and disappear.
Hard vs. Soft Inquiries
When you apply for Verizon service, the carrier will typically conduct a hard inquiry, also known as a hard pull, on your credit report. According to Experian, one of the three major credit bureaus, a hard inquiry is "a formal request to review your credit report to make a lending decision." In this case, the lending decision is whether to approve you for Verizon service and on what terms.
Hard inquiries appear on your credit report and can slightly ding your credit score (usually by about 5-10 points). The impact is relatively small and temporary, but it‘s worth noting if you plan to apply for other major lines of credit in the near future, like a mortgage or car loan.
In contrast, existing Verizon customers may periodically have their credit reviewed via a soft inquiry or soft pull. Soft inquiries don‘t affect your credit score at all and are more of an informal checkup to ensure an account remains in good standing. Many companies, including utility providers and credit card issuers, use soft inquiries to monitor existing customer accounts.
Verizon‘s Credit Score Tiers and Deposit Amounts
So what credit score do you need to get approved for Verizon service? While the company doesn‘t publicize specific numbers, customer data points and insider sources suggest the following tiers:
| Credit Tier | Credit Score Range | Deposit Amount |
|---|---|---|
| Excellent | 750+ | $0 |
| Good | 650-749 | $125 |
| Fair | 600-649 | $400 |
| Poor | Below 600 | $1000 |
These tiers are just a general guide, and some customers may fall outside these ranges based on other factors in their credit history. But in general, a score of 650 or higher is considered good to excellent and will likely result in little to no deposit. A score below 600 will make it much harder to get approved without a significant upfront payment.
To put these scores in context, the average FICO credit score in the U.S. is 711 according to a 2021 report by Experian. About 16% of Americans have a score below 580, which would fall into Verizon‘s "Poor" tier. On the flip side, about 21% have a score of 800 or above, considered "Exceptional" and well above Verizon‘s top tier.
Other Credit Factors Verizon Considers
Your credit score is just one piece of the puzzle Verizon uses to evaluate your creditworthiness. They‘ll also look at factors like:
- Payment history: Do you have a track record of paying bills on time across all your credit accounts? Late or missed payments can be a red flag.
- Credit utilization: How much of your available credit are you currently using? High utilization (above 30%) can indicate financial stress and risk of default.
- Derogatory marks: Significant negative events like bankruptcies, collections, or foreclosures can severely hurt your chances of approval.
- Length of credit history: A longer history of responsible credit use is generally better than a short one.
Verizon will look at the full context of your financial picture, not just a single number. This is part of why credit decisions can sometimes seem inconsistent or unpredictable from the outside.
How Verizon‘s Credit Check Compares to Other Carriers
Verizon‘s credit policies are generally in line with other major postpaid carriers. AT&T, for example, also uses a hard inquiry and deposit tiers based on credit score. T-Mobile has a similar system, though they offer slightly more lenient terms for those with poor credit, like an extra 12 months to pay off device financing.
Where Verizon stands out is in its network quality and customer service reputation. They consistently rank at or near the top of industry surveys for reliability, speed, and support. For many customers, paying a slightly higher deposit with Verizon is worth it for the better overall experience.
That said, it‘s always a good idea to shop around and compare offers from multiple carriers before committing. You may find that one is willing to work with you on deposit amounts or credit requirements, especially if you‘re bringing over multiple lines or have a history with the company.
Alternatives for Those with Poor Credit
If your credit score is on the lower end, there are still ways to access Verizon service without a massive upfront payment. One option is to find a cosigner, like a family member or close friend, who can vouch for your ability to pay. Just be aware that cosigning comes with serious responsibility, as that person will be on the hook if you miss payments.
Another route is to sign up for one of Verizon‘s prepaid plans, which don‘t require a credit check at all. You‘ll pay for service upfront each month, so there‘s no risk of unpaid bills or late payments. Prepaid plans tend to be slightly pricier than postpaid ones, but they‘re a good way to build a positive payment history with Verizon that could help you transition to postpaid down the line.
You could also look into credit-building tools like secured credit cards or credit-builder loans. These products are designed for people with limited or damaged credit and can help you establish a record of on-time payments. Just be sure to use them responsibly and pay your balance in full each month to avoid high interest charges.
Maintaining Good Credit with Verizon
Once you‘re approved for Verizon service, your credit journey with the carrier is just beginning. To avoid any surprise credit checks or deposit increases down the line, it‘s important to maintain good financial standing with the company. Here are a few tips:
- Always pay your bill on time. Set up autopay or calendar reminders to avoid accidentally missing a due date. Late payments can trigger a credit reevaluation and deposit requirement.
- Monitor your credit report regularly. Check for errors or fraudulent activity that could be dragging down your score without you realizing it. You can request a free copy of your report from each credit bureau once per year at AnnualCreditReport.com.
- Communicate proactively with Verizon. If you‘re experiencing financial hardship or need to make a change to your account, reach out to customer service as soon as possible. They may be able to work out a payment plan or temporarily suspend service to avoid negative credit reporting.
- Keep your credit utilization low. Try to use no more than 30% of your available credit at any given time, including your Verizon financing plan. High utilization can lower your score and make it harder to upgrade devices or add new lines in the future.
Remember, your credit is a long-term asset that requires ongoing attention and care. By using it responsibly with Verizon and other financial partners, you can open doors to better deals and opportunities down the road.
The Bottom Line
In conclusion, Verizon does run a credit check on most new customers and periodically on existing ones. This process helps the carrier manage risk, prevent fraud, and ensure that customers can pay their bills reliably. Your credit score and history will largely determine whether you‘re approved for service and how much you‘ll need to pay upfront in deposits or device financing.
If you have good to excellent credit, you‘ll likely sail through Verizon‘s credit check process with little to no upfront costs. But if you have limited or damaged credit, you may need to explore alternative options like prepaid plans or cosigners to get started.
Regardless of your credit situation, it‘s important to do your research, compare offers from multiple carriers, and have a plan in place to maintain good financial standing with Verizon over time. By being proactive and informed, you can navigate the credit check process with confidence and get the mobile service you need to stay connected in today‘s fast-paced world.
