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Q: I’m interested in switching my phone service to Verizon. Will this company run a credit check on me?
A: Short answer? Yes, Verizon will check your credit. This isn’t unusual. Credit scores are king today. Lenders of all types use them to determine to whom they’ll lend money and at what interest rates. Even employers — as many as 60 percent according to a recent 2015 survey — check credit scores when making hiring decisions.
Service providers, such as phone companies, use them to decide whether potential customers are likely to pay their bills on time.
If you have a low credit score, you might still be able to sign up with Verizon. The company, though, might charge you a security deposit if your three-digit credit score is too low. This deposit — it can run as high as $400 with Verizon — will provide the company with financial protection in case you miss your payments. If you don’t pay your bills, Verizon will take your deposit.
If you do not want to pay a security deposit, you can choose a prepaid plan instead. You can read about pre-paid cell phone plans from Verizon and other carriers here.
The good news is that it’s relatively simple to improve your credit score. If you make a vow to always pay your monthly bills on time, and if you take whatever steps you can to pay down your outstanding credit card debt, your credit score will gradually, but steadily, improve.
Once your score rises high enough — usually in the 700 range — you won’t have to worry about paying a security deposit to sign up with Verizon or any phone service provider. And you won’t have to worry about paying exorbitant interest rates, either, when you’re applying for mortgage, auto or personal loans.