The Ultimate Guide to the Apple iPhone Upgrade Program and Your Credit Score

Are you an avid iPhone user always eager to have the latest model in your hands? The Apple iPhone Upgrade Program might be the perfect solution for you. This innovative program allows customers to get a new iPhone every year and spread the cost over 24 monthly payments. However, before diving in, it‘s crucial to understand how the program works and its potential impact on your credit score.

In this ultimate guide, we‘ll provide an in-depth look at the iPhone Upgrade Program, including its benefits, credit requirements, and how it can affect your credit health. We‘ll also offer expert tips for maintaining a good credit score and explore alternative iPhone financing options. By the end of this article, you‘ll have all the information you need to make an informed decision about whether the iPhone Upgrade Program is right for you.

How the iPhone Upgrade Program Works

The iPhone Upgrade Program is essentially a 24-month installment plan that bundles the cost of a new iPhone and AppleCare+ coverage into a single monthly payment. Here‘s a step-by-step breakdown of how it works:

  1. Choose your desired iPhone model and storage capacity.
  2. Select the iPhone Upgrade Program as your payment method.
  3. Agree to the terms and conditions, which include 24 monthly payments, AppleCare+ coverage, and the option to upgrade after 12 payments.
  4. Complete a credit application through Apple‘s financing partner, Citizens One.
  5. Once approved, complete your iPhone order and make the first monthly payment.
  6. After 12 payments, you‘re eligible to trade in your current iPhone for a new model, essentially starting a new 24-month plan.
  7. If you decide to keep your iPhone after 24 months, you‘ll own it outright after making the final payment.

One of the key benefits of the iPhone Upgrade Program is the included AppleCare+ coverage, which extends your warranty and adds coverage for up to two incidents of accidental damage every 12 months. According to Apple, "AppleCare+ for iPhone includes up to two incidents of accidental damage protection every 12 months. Each incident is subject to a service fee of $29 for screen damage or $99 for any other damage."

Understanding iPhone Upgrade Program Monthly Payments and Interest Rates

When you enroll in the iPhone Upgrade Program, your monthly payment is based on the retail price of your chosen iPhone model, the included AppleCare+ coverage, and any applicable taxes and fees. Apple offers a 0% annual percentage rate (APR) for the program, which means you won‘t pay any interest on your installment plan as long as you make your payments on time.

Here‘s an example of how the monthly payments are calculated:

iPhone Model Retail Price AppleCare+ Total Cost Monthly Payment (24 months)
iPhone 12 (64GB) $799 $149 $948 $39.50
iPhone 12 Pro (128GB) $999 $199 $1,198 $49.91
iPhone 12 Pro Max (256GB) $1,199 $199 $1,398 $58.25

Keep in mind that these prices are subject to change with each new iPhone release and may vary based on your location due to differences in tax rates.

iPhone Upgrade Program Credit Check and Requirements

To participate in the iPhone Upgrade Program, you must be at least 18 years old and meet certain credit requirements. When you apply, Apple‘s financing partner, Citizens One, will perform a credit check to determine your eligibility.

The credit check is considered a "hard inquiry," which can temporarily lower your credit score by a few points. According to credit expert, John Ulzheimer, "A single hard inquiry will typically drop your score by less than five points, and the impact is temporary. The inquiry will remain on your credit report for two years, but its effect on your score will diminish over time."

While Apple doesn‘t disclose a minimum credit score requirement, most experts agree that a credit score in the "good" range (670 or higher) will give you the best chance of approval. However, some consumers have reported being approved with scores in the 600s.

In addition to your credit score, Citizens One will also consider factors such as your income, credit history, and existing debt obligations. Negative items on your credit report, like late payments or collections, could hurt your chances of approval.

How the iPhone Upgrade Program Can Impact Your Credit

Participating in the iPhone Upgrade Program can affect your credit in a few ways:

  1. Hard inquiry: As mentioned earlier, the credit check required for enrollment will result in a hard inquiry on your credit report, which can cause a small, temporary dip in your credit score.

  2. New installment account: If approved, the iPhone Upgrade Program loan will appear on your credit report as a new installment account. Your monthly payments will be reported to the credit bureaus, and consistently making on-time payments can help you build a positive payment history over time.

  3. Increased debt load: Enrolling in the program will increase your overall debt, which can impact your credit utilization ratio (the amount of credit you‘re using compared to your credit limits) and your debt-to-income ratio. These factors can influence your credit score and your ability to obtain other loans or credit in the future.

It‘s crucial to understand that late or missed payments on your iPhone Upgrade Program loan can severely damage your credit score. Payment history is the most important factor in your FICO score, accounting for 35% of the total. Even one late payment can cause your score to drop significantly and remain on your credit report for up to seven years.

Tips for Maintaining a Good Credit Score

Whether you‘re considering the iPhone Upgrade Program or simply want to maintain a healthy credit profile, here are some expert tips to follow:

  1. Check your credit report regularly for errors or signs of fraud. You can request a free copy of your credit report from each of the three major bureaus (Equifax, Experian, and TransUnion) at

  2. Pay all your bills on time, every time. Set up automatic payments or reminders to ensure you never miss a due date.

  3. Keep your credit utilization low by paying down credit card balances and avoiding maxing out your cards. Aim to keep your utilization below 30% of your available credit.

  4. Be selective about applying for new credit. Each application results in a hard inquiry, which can lower your score. Only apply for credit when necessary.

  5. If you have limited credit history, consider a credit-builder loan or secured credit card to establish a positive payment record.

Remember, building and maintaining a good credit score takes time and discipline. By consistently practicing responsible credit habits, you can improve your chances of qualifying for the iPhone Upgrade Program and other financial opportunities in the future.

iPhone Upgrade Program Adoption and Satisfaction Rates

Since its launch in 2015, the iPhone Upgrade Program has become an increasingly popular way for consumers to get their hands on the latest iPhone models. According to a 2019 survey by Consumer Intelligence Research Partners (CIRP), around 16% of iPhone buyers in the United States used the iPhone Upgrade Program to finance their purchase.

The same survey found that iPhone Upgrade Program customers tend to be more satisfied with their iPhones compared to those who purchased their devices outright or through carrier financing. Approximately 94% of iPhone Upgrade Program customers reported being "very satisfied" or "somewhat satisfied" with their iPhone, compared to 87% of non-program customers.

These high satisfaction rates can be attributed to several factors, including:

  • Always having the latest iPhone model
  • Included AppleCare+ coverage for added peace of mind
  • Convenient and predictable monthly payments
  • Ability to upgrade every year without worrying about device trade-in values

As Apple continues to innovate and release new iPhone models with advanced features, the iPhone Upgrade Program is likely to remain a popular choice for tech-savvy consumers who prioritize having the latest devices.

Alternative iPhone Financing and Upgrade Options

While the iPhone Upgrade Program offers a convenient and streamlined way to get a new iPhone every year, it‘s not the only option available. Here are some alternatives to consider:

  1. Carrier financing: Major wireless carriers like AT&T, Verizon, T-Mobile, and Sprint offer their own installment plans for iPhones, often with more flexible terms and potentially lower credit requirements compared to the iPhone Upgrade Program.

  2. Apple Card Monthly Installments: If you have an Apple Card credit card, you can finance a new iPhone over 24 months with 0% APR and no additional credit check required.

  3. Buy outright and trade-in later: If you have the funds available, you can purchase your iPhone at full price and then trade it in when you‘re ready to upgrade. Apple and most wireless carriers offer trade-in programs that give you credit towards a new device.

  4. Refurbished or used iPhones: Buying a refurbished or used iPhone can be a more affordable way to upgrade without committing to a financing plan. Apple, wireless carriers, and reputable third-party sellers offer high-quality refurbished devices at lower prices.

When choosing between these options, consider factors like overall cost, upgrade frequency, credit requirements, and included perks like AppleCare+ coverage. Select the plan that best aligns with your budget, lifestyle, and personal preferences.

Is the iPhone Upgrade Program Right for You?

The iPhone Upgrade Program can be an excellent choice for certain types of consumers, particularly those who:

  • Always want to have the latest iPhone model with the newest features
  • Prefer the convenience of spreading the cost over monthly payments
  • Value the peace of mind provided by AppleCare+ coverage
  • Have a good to excellent credit score and can meet the program‘s credit requirements
  • Are comfortable with a hard credit inquiry and taking on a new installment loan

However, the program may not be the best fit for everyone. You might consider alternative options if you:

  • Are content keeping your iPhone for two or more years before upgrading
  • Prefer to buy your iPhone outright to avoid monthly payments and potential interest charges
  • Have limited or poor credit history and may not qualify for the program
  • Are working to minimize new credit inquiries and reduce your overall debt load
  • Want greater flexibility in choosing your wireless carrier and plan options

Ultimately, the decision to enroll in the iPhone Upgrade Program should be based on a careful assessment of your personal preferences, financial situation, and credit profile. By thoroughly evaluating the pros and cons and exploring alternative financing options, you can make an informed choice about the best way to upgrade your iPhone while maintaining your credit health.


The Apple iPhone Upgrade Program provides a compelling option for consumers who want to have the latest iPhone model every year without paying the full price upfront. By bundling the cost of the device and AppleCare+ coverage into a single monthly payment, the program offers convenience, predictability, and added peace of mind.

However, it‘s essential to understand the program‘s credit requirements and potential impact on your credit score before enrolling. Late or missed payments can significantly damage your credit, so it‘s crucial to stay on top of your monthly installments and practice responsible credit habits.

If you‘re unsure about qualifying for the program or have concerns about its effect on your credit, consider alternative iPhone financing options like carrier installment plans, the Apple Card, or buying a refurbished device. By carefully weighing your options and making an informed decision based on your unique circumstances, you can find the best way to upgrade your iPhone while protecting your financial well-being.

As Apple continues to innovate and release new iPhone models with groundbreaking features, the iPhone Upgrade Program is likely to remain a popular choice for tech-savvy consumers who prioritize having the latest devices. By staying informed about the program‘s requirements, benefits, and potential drawbacks, you can make a smart decision about whether it‘s the right choice for you.