Q: I’m thinking about signing up for a cell phone plan with Verizon. I know they will run my credit, but will they do a hard or soft credit check?

A: Verizon will do a hard check on your credit if you sign up for any of their post-paid plans. If you go with their pre-paid service, they will not run any credit check. For those that do not know what this means, a hard credit check refers to when a company pulls your credit report or score with your permission, usually when you are trying to obtain credit. A soft credit check is when you view your own credit report or score, or when companies check it for pre-approved offers where you did not grant them permission. Unfortunately, this means that your score may drop a few points when you sign up for a new plan with Verizon, but it should not be more than about 5 points, so it isn’t a big deal and your credit should bounce back quickly.

The credit check is required so that Verizon will know how large of a security deposit they should charge. If they sell you a phone for $350 off its retail price and let you pay a $100 a month plan after the fact, they stand to lose a lot of money. Your security deposit can be up to $400 per line, depending on your credit score. If you have an excellent credit score, you may not be required to pay a security deposit at all. Even if you are stuck with a hefty deposit, if you pay your phone bill on time each month, you will get it back with interest in a year.