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Planning to sign up for new wireless service with Verizon? If so, there’s a good chance you’ll be required to submit to a credit check from America’s largest mobile telecommunications network.
Verizon Wireless requires a credit check if you’re a new customer or you’re adding a new line to your service, not just upgrading your phone, and it’s possible your deposit may be as high as $1,000 per line.
That means you could be asked to fork over $3,000 just to get three lines of service!
Step 1: Check Your Own Credit Score First
Verizon Wireless has fairly stringent requirements, although their security deposits do not start as high as AT&T.
It’s extremely important to know your credit scores before signing up for new wireless service (or in some cases upgrading your current service) because Verizon uses these scores to determine if you are eligible for service and if a downpayment will be required.
If you have a credit score below 720 you may be required to pay a substantial deposit for service.
Step 2: Estimate Your Required Deposit
Once you know your credit scores, you can use our Wireless Service Deposit Calculator to estimate your total required deposit.
The deposit calculator uses historical data to provide you with a rough estimate of what you may be required to pay when signing up for new service. It will also provide customized suggestions to reduce your deposit based on the information you provide.
Step 3: Reducing Your Deposit
There are two great ways to minimize or eliminate your deposit. Verizon and most other wireless carriers always have online promotions and deals that can help to offset any deposit that may be required. Many times, it’s possible to find a promotion that reduces the cost of a new phone by $100 or more.
Your deposit is also determined by the plan you choose. Choosing a more basic plan, and reducing the amount of lines you request, may help to minimize the deposit you need to pay.
If you’d rather skip the credit check altogether, Verizon does have a pay as you go plan available. They currently have three prepaid plans, two of which charge a daily access fee but come with unlimited mobile-to-mobile calling. When you apply refills to your account, they will expire in 30 days to one year.
The prepaid plan allows you to pay for what you use and there is absolutely no credit check or annual contract necessary for this service. You can choose from basic phones, smartphones or tablets, and their prepaid smartphone plans include unlimited talk and text starting at $60/month.
Why Does Verizon Wireless Perform Credit Checks?
All major wireless carriers use credit checks as a tool to determine how likely applicants are to pay their bills. While you may not think of a cell phone line as in any way similar to a credit card, both are actually forms of credit and it’s much easier to run up a high bill on a cell phone compared to a landline.
Studies have found a correlation between credit rating and default risk, so Verizon Wireless checks the credit of new customers to see how responsible they have been in the past.
While having bad credit does not mean you are irresponsible, as it may be the result of situations beyond your control, having poor credit does increase your risk of default in the eyes of a creditor, and they will hedge their bets by requiring a security deposit.
When Verizon Wireless runs a credit check on you, they’re going to look at the amount of debt you already have, whether you have any collections or charged-off accounts, your payment history and the limits on your credit accounts to get an overview of your financial stability.
Will I Need to Pay a Deposit?
Depending on your credit score and credit history, one of three things will happen: you will be denied for service, you will be required to pay a deposit or you may have no deposit at all.
The good news is Verizon Wireless denies very few applicants, and even a recent bankruptcy on your record will not eliminate you, although you will be looking at a high deposit in this case.
Verizon Wireless deposits range from $150 to $1,000, and this deposit is required per line, not per account. Most people who are required to pay a deposit seem to fall in the $400 to $450 range.
The deposit you need to pay will be based on your credit score and credit history, although it seems a score above 600 may not require a deposit at all unless there is a bankruptcy on file.
According to the Terms and Conditions, your security deposit will not accrue interest and it will be held until you have completed an entire year of satisfactory payment history with no service interruption. This means you will get your deposit back if you make on-time payments for a full 12 months.
How Do I Improve My Credit?
Of course, the best thing you can do is spending a few months to clean up your credit before you even apply for wireless service. Start by ordering copies of your credit reports and then check for mistakes, such as accounts that don’t belong to you. Report any errors to the credit bureaus right away.
The next step is looking for red flags on your credit file, such as recently missed payments. If you have late payments reporting, you might have luck contacting your lender to request a goodwill adjustment.
Other steps you can take to improve your credit include requesting credit limit increases on your credit cards (not opening new accounts), paying down your debt to improve your debt-to-credit ratio and even adding a new type of credit to your files, such as a car loan or store credit.
While Verizon Wireless doesn’t have the highest security deposits in the industry, they can require up to $1,000 per line and their requirements are stringent. Your best bet is working on your credit before you apply, or considering their prepaid plan if the deposit you’re quoted is unaffordable.