Owning a mobile smartphone device is a necessity in today’s world. With new and innovative technology coming out every day, most people upgrade their phones to newer devices approximately every two years. It doesn’t seem that it should be difficult—you simply walk into your carrier’s store and make a purchase. Carrier advertisements portray this process as very easy and straightforward. Unfortunately, the truth is a lot less convenient. Many people who struggle with poor credit have no options other than to pay a large deposit or get stuck with a large monthly payment.
To put it simply, it can be difficult in Canada to get a new cell phone with a not-so-good credit history or no credit history at all. If you’re struggling with bad credit or no credit, don’t worry. You’re not alone, and you actually have more choices than you think. In this guide, we explore the minimum credit score you need along with a number of additional options if you can’t quite meet that mark.
How to Get a Mobile Phone with Bad Credit in Canada Step-by-Step
We’ll break down everything you need to know about your credit check, the minimum credit score that smartphone carriers look for, additional options like prepaid plans, and everything else you need to know about buying a phone with bad credit. We’ll also offer some tips for getting the right device and unlimited talk plans for those with no credit at all. First, let’s look at the minimum credit score you need to buy a mobile phone.
What’s the Minimum Credit Score Needed to Buy a Mobile Phone?
In most situations, a phone carrier will consider a credit score of 600 or below to be “bad.” If your credit score is around this number, you might not pass a credit check with a phone provider. Keep in mind that the actual minimum credit score you will need depends on the individual carrier. Sprint considers a credit score of 550 or lower to be bad, while T-Mobile will accept any credit score (in most cases) over 600. If you are dead set on a specific carrier, try looking up their minimum credit score for approval before you apply for a plan.
How Do You Check My Score?
Canadian consumers can order a free copy of their credit report from Equifax Canada or TransUnion Canada. Requesting your report through these two bureaus will not affect your credit score in any way. If you need your credit report very quickly, TransUnion allows users to look up their credit report online once per month for free and for a small fee every time after that. If you know your credit score before stopping by your phone carrier, you’ll be more prepared.
Keep in mind that if you do not have any credit history, many phone carriers will reject your application for a phone or a plan. This is simply because there is no record of your history with borrowing money or paying off credit cards. You can build your credit by getting a credit card or loan, but this also comes with its own risks.
Four Ways to Get a Phone if You Have Bad Credit
So what can you do if you have checked your credit report and discovered that your credit is… disappointing? There are a few easy ways to get a phone and a plan even if you have bad credit or no credit at all.
1. Get a Pre-Paid Plan
When your credit score falls under the minimum required score, you have the option of choosing a prepaid phone plan. A prepaid plan does not require a credit check because there is no physical contract to sign—you pay as you go, ahead of time. There’s no risk for the phone carrier or provider.
The pre-paid route has some pros and cons. To start, when you purchase a prepaid phone plan, you might be paying a premium. To make matters worse, you can’t finance your new phone because you’ll need to purchase it outright before opting for a prepaid plan. However, an excellent solution to this problem is to purchase a used phone. Since it is the law in Canada that all mobile devices must be unlocked, finding the right device will be a breeze.
2. Have a Cosigner Sign Your Contract
In many situations, even if you have a poor crediting rating, you can still make large purchases if you have someone with good credit who is willing to cosign your contract. You should choose someone you trust to cosign your cell phone purchase or mobile plan. Many people choose a parent or spouse to be their cosigner.
The downsides of this option are worth noting. You will not have the same privileges and freedom that you would if you did not have a cosigner. If you want to change anything about your plan, you will have to go through your cosigner to do so. You also won’t be able to improve your bad credit rating through ongoing monthly plan payments. Since your contract will be under the cosigner’s name, only that person’s credit rating is affected.
3. Get Added to a Family Plan
If you have a group of friends or family members who have an established family plan, you could easily be added to that plan. This is one of the best choices you can make if you do not have good credit. If a family plan has an open line, you can be quickly added to it without having to assume any credit responsibility. You’ll have virtually all of the same benefits and risks as a cosigner.
4. If All Else Fails, Pay the Deposit
We get it—that dreaded deposit is a lot of money. A deposit is the only way a carrier can cover its losses if you do not pay them in full or on a regular basis. Many carriers will offer you the option of making a deposit. The actual amount of the deposit varies, depending on the device, the plan, the carrier, and your credit score, but you can expect to pay at least 25% of the cost of the phone. Some carriers even refund deposits after a certain number of payments are made.
Recommendations
We believe the best option is a family plan. This reduces the potential risks associated with your credit. As well, having a family plan with multiple people is less risky for the actual plan owner than simply cosigning your individual plan.
If this isn’t an option for you, your best bet would be to spend the money on a deposit or on a pay-as-you-go plan. In the meantime, you can try to work on your credit by paying off loans, credit cards, and other debt. It can take a while to get your credit score to nudge, but within a year or two, you may be able to boost your credit rating high enough to opt for a different plan and a newer device.
Conclusion
Having bad credit or no credit is not a dead-end when it comes to getting a great phone and plan in Canada. If you can get a cosigner or can shell out the cash for a bigger deposit, you’ll be able to get your ideal device and plan before you leave your carrier’s store. Just keep in mind that the best way to get a mobile phone with bad credit is to work on boosting your credit rating.
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