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Q: When I was signing up for a new cell phone plan with AT&T, I was surprised when they required a credit check. Why do they do this?
A: Yes, AT&T does require a credit check for new customers, as most cell phone carriers do. If you are only upgrading your phone, not creating a new account or adding a new line, there should be no credit check.
The AT&T credit check is to determine what your security deposit should be, since those with poor credit scores are more likely to pay late or not pay at all, and they want to eliminate this risk.
The security deposit varies depending on your credit score. Those with a very good credit score will not have to pay a security deposit at all, while those with a very poor credit score could end up paying up to $750 in advance. And that’s not counting the price of your new phone. A few customers may find that they are charged a security deposit of $800, but that is only for those who have had unpaid bills with AT&T that were written off.
You will get that payment back in 6 months to a year if you pay your cell phone bill on time every month. If you make a late payment, AT&T may extend the time until you receive your security deposit. If you cancel your AT&T service and pay any outstanding bills and early termination fees, you will get your security deposit back within a few weeks.
Or you can avoid paying a security deposit by choosing one of AT&T "Go Phone" plans (which is just the AT&T brand name for the mobile prepaid mobile service).