How to Get Approved for a Cell Phone with Bad Credit

There are horror stories all over the place about people with bad credit being turned away when trying to buy a cell phone and set up wireless service.

Here is the truth: yes, most of the carriers still check your credit. However, bad credit does not necessarily mean that you are doomed to live in the dark ages of depending on a landline. It is possible to get cell phone service with bad credit.

Why is Your Credit Score Important When You’re Shopping for a Cell Phone?

Cell phones aren’t just getting smarter all the time, they’re also getting more expensive. Cell phone carriers understand that the average consumer can’t just fork over cash for a phone, so they break the price down into smaller payments.

The cell phone carriers want to make sure that you’ll be able to make your payments. They do this by running a credit check. If your rating is too low, they will not let you purchase the new phone.

That does not mean, however, that you’re cooked! There are still plenty of options available.

What to Look For in a Cell Phone Plan

What is it, exactly, that you need your phone to be able to do? Do you need it to do anything beyond make and receive phone calls? Will you be mostly keeping your phone connected to a Wi-Fi signal or will you need access to lots of cellular data?

Figure out what you want and need your cell phone to do and then shop around for the plan that offers you the best price to meet those needs.

How to Buy a Phone With No Credit Check

There are a few ways to get around the credit check issue. You could buy an unlocked phone. You could opt into a pre-paid plan. You could buy a used or refurbished phone. You could buy a pre-paid phone (this is different than a pre-paid plan).

Buy an Unlocked Mobile Phone

This is a good option if you want to buy a specific phone, but you don’t want to be forced into a specific plan or carrier.

What’s an Unlocked Phone?

An unlocked phone is a phone that is not pre-locked into a specific carrier’s signals. You can keep the same phone but move that phone to different carriers or networks. Typically, all this requires is for you to switch out the phone’s SIM card.

Benefits of Unlocked Cell Phones

Choices abound! You can choose your phone, where to buy it, which carrier to sign up with, and what plan you’ll use.

Unlocked phones work with most of the major networks.

You can buy your unlocked phone from pretty much anywhere. Tons of different retailers sell these phones.

The primary drawback to an unlocked phone is that you will need to buy a cellular data plan if you want to use your phone away from a Wi-Fi signal.

Things to Consider Before Buying an Unlocked Phone

Shopping for an unlocked phone is just like shopping for a cellular plan. What do you want the phone to be able to do? Do you want a specific brand or operating system? Do you want a specific model? How much can you afford to spend?

Where to Buy an Unlocked Phone?

Most of the big-box stores have unlocked phones in stock. Best Buy, Amazon, Walmart, Target, etc. The Apple store is another option, but only if you have your heart set on an iPhone.

Sign Up for a Prepaid Plan

If you’re on a very tight budget and/or not sure about committing to a contract, a prepaid plan is the way to go. Instead of a base rate + overage charges, you pay upfront at the beginning of the month. Then, if you run out of time/texts/gb of data, you can choose whether you want to buy more, or put your phone away until the next month when your limits refresh.

Unlike contracts, most prepaid plans don’t require you to commit to a specific number of months or years with the carrier. You can even change your plan from month to month, depending on your needs.

Top Prepaid Service Plans from Major Cell Phone Companies

All the major carriers offer prepaid service plans. Here’s a quick overview of some of the best options out there right now.

Verizon Prepaid Plans
  • Cost: $40-$75/month 
  • Plan Details: All plans come with unlimited talk and text, with unlimited text to 200 different “international locations.”
  • Unlimited Data Plan: starts at $65/month. If you want 5G access, it’s $75/month.
  • Can You Use Your Own Phone?: Yes
  • Discounts: Verizon offers loyalty discounts, that reduce your bill based on the number of months in a row you have stayed with their service. 
AT&T Go Plan 
  • Average cost: $25-$50 with AutoPay, $25-$75 without AutoPay
  • Plan Details: All plans come with unlimited talk and text, rollover data, a mobile hotspot, and high-speed data
  • Unlimited Plan: $50/month with autopay, $75/month without autopay
  • Can You Use Your Own Phone?: Yes
  • Discounts: If you bring your own device, you won’t have to pay an activation fee.
T-Mobile Simply Prepaid
  • Average cost: $40-$60 (plus taxes and fees)
  • Plan Details: Unlimited talk and text, scam-blocker protection, music unlimited
  • Unlimited Plan: $50 for 3G speeds, $60 for 4G (up to 10gb then 3G after that) speeds.
  • Can You Use Your Own Phone? Yup
  • Discounts: Maybe, it depends on which store you go to. The website has a link you can use to check your local area.

T-Mobile (which recently merged with Sprint) has also started a program it calls the Smartphone Equality Program, which promises “best lease pricing” if you make on-time payments for 12 months. That means you won’t need to make a downpayment and will skip the credit check the next time you need a new smartphone.

TextNow Wireless 2 GB LTE

TextNow is a little different because it is an app that gets downloaded onto your existing phone. If you are connected to Wi-Fi you can make calls and text. There’s even a free version that is supported by ads. If you don’t want to deal with ads and don’t need cellular data/access, plans start at $9.99.

  • Average cost: $0 – $19.99
  • Plan Details: Unlimited talk and text for free over Wi-Fi, if you want cellular data, plans are currently $19.99 for 2gb/month
  • Unlimited Plan: Nope.
  • Can You Use Your Own Phone? You kind of have to. The company does sell some older model cell phones, but their stock is limited.
  • Discounts: Not really, but it’s hard to beat free if you just need something that will let you make calls and send texts occasionally.
Tello
  • Average cost: $7-$39/month
  • Plan Details: If you don’t need data, the basic $7/month plan offers 500 minutes and free texts. From there, prices vary depending on the data package, but all plans come with unlimited talk and texting.
  • Unlimited Plan: $39/month for unlimited talk, text, and data
  • Can You Use Your Own Phone? Yes
  • Discounts: 50% off your first month
Xfinity Mobile by the Gig

This is best for people who already have Xfinity services—cable/phone/internet. If you don’t have any of those, there is an extra $25/month charge added to your plan’s cost.

  • Average cost: $15-$60/month for “by the gig” data plans
  • Plan Details: All plans offer 4G LTE data and unlimited talk/text. 
  • Unlimited Plan: $45-$240/month, depending on how many lines you need.
  • Can You Use Your Own Phone? Yes.
  • Discounts: Technically no, since this is offered as an add-on to existing Xfinity services and bundles.
Spectrum Mobile by the Gig

This plan is only available to customers who already have Spectrum internet.

  • Average cost: $14/gig—pay as you go.
  • Plan Details: unlimited talk and text
  • Unlimited Plan: $45/month for just one line, $29.99/month per line for multiple-line plans. 
  • Can You Use Your Own Phone? Yes
  • Discounts: The more lines you have, the cheaper each line gets.

Buy a Pre-Owned Phone

Shop around on sites like Craigslist, eBay, Mercari, etc. for older phones. You can also shop for refurbished phones. Check around with your friends and family. Maybe someone has an older phone they can give you or sell to you at a reduced price.

Once you have a used or refurbished phone, all you have to do is put a new SIM card into it—and those are usually only a couple of bucks.

Prepaid Phones Without a Contract That You Can Buy Now

For the ultra budget-conscious, a prepaid phone with a pay-as-you-go plan is the best bet. These are the phones you see when you shop at Target, Walmart, even your local grocery store. They start at around $10 for a super basic phone and can run up to a couple of hundred bucks for a fancy-ish smartphone. These are run on networks like Cricket Wireless, Boost Mobile, Virgin Mobile, Jitterbug, etc. 

The biggest pro of going this route is that you can get a phone and a plan for super-cheap prices. 

Other Ways to Get a Phone with Bad Credit

If you don’t want to go the pre-paid plan/phone route, there are still some options available if you have bad credit.

Find a Co-Signer

Having a credit-worthy co-signer tells the retailer that someone will be making the monthly payments on the phone and plan, even if you can’t. 

Get a Relative to Add You to a Family Plan

This is the cheapest and easiest way to get a newer phone and a good plan without having to spend a lot of money or have a good credit score. Most plans will allow customers to add users for relatively low prices (some even as low as $10/month). A lot of the major carriers also offer incentives like monthly discounts, etc. to customers who add lines and users to their plans! Plus, then the plan isn’t in your name, so it won’t have any effect on your credit score.

Pay a Security Deposit

Some cellular providers will allow users to make a down payment against the cost of the phone, then pay the remaining balance in installments. This way, if you default on your payments, the provider will still get something to cover the cost of your device. When you go this route, most service providers will make you sign up for automatic payments or debits. Security deposits can vary from a few hundred to around $1,000, depending on what kind of phone you want to buy and your credit score.

How to Build Credit So You Can Qualify for Phone Financing

First, make sure your score is accurate. Get a copy of your credit report from each of the three major credit reporting bureaus—Experian, Equifax, and TransUnion. Make sure the reports are mistake-free. Then take steps to improve your score—start making your monthly payments on time, pay down your debt, increase your income, etc.

Take out a Credit Builder Loan

A credit builder loan is a savings plan that helps you improve your credit score and history. A company creates a “loan” for you and then reports on your progress to the credit bureaus.

However, instead of giving you the money now and you paying it back, you make monthly payments into your account. When your payment period is over, you get to use the money you saved.

There are quite a few companies out there that offer these types of “loans.” You’ll want to take some time to research your options, of course, but our favorite is Self.

Want to learn more about credit builder loans? Check out this video:

The Bottom Line

The question is not whether you need a cell phone. Maslow says no, societal norms say yes. The question is how you will get the cell phone you want and need. Hopefully you’ve found some help in the tips we’ve shared!

FAQs

Do I Need a Credit Card to Sign Up for a Mobile Phone Plan?

Nope. You do, however, need a credit score. Your credit rating will make a difference if you’re trying to finance a new smartphone.

Is it Smart to Finance a Cell Phone?

This depends on your current needs. It can be much cheaper to buy the phone outright if you have the cash to do so.

What are the Top Cell Phones and How Much Do They Cost?

Tech Radar says that the very best phone in the world right now is the Samsung Galaxy S21 Ultra, which costs around $1200 outright or $50/month on a two-year contract. Other top phones include:
Apple iPhone 13 Pro: starts at $999 outright, $41/month on a two-year contract
Google Pixel 6 Pro: $899 outright, $38/month on a two-year contract.

What Does My Credit Score Mean?

Here is how the credit scores are usually judged:
< 580 = Bad/Poor creit
580 – 669 = Fair credit
670 – 739 = Good credit
740 – 799 = Very good credit
800 – 855 = Excellent credit

Why do Retailers Care About my Credit Score?

Your credit score is seen as an indicator of how responsible you are with credit. If your score is low, that makes you look irresponsible. Retailers don’t want to take the risk of loaning to someone who looks irresponsible.