Getting a Contract Cell Phone with Bad Credit

Given the amount of money someone can spend on their cell phone bill with ringtones, wallpapers, applications, international long distance, and other charges, cell phone companies are increasingly becoming more stingy, asking for huge deposits to secure service. This article will help you understand which cell phone carriers are likely to give you service even if you have bad credit.

Even if you do have bad credit and need a deposit, you do get it back. Most cell phone carriers require 12 months of on time payments, with no suspensions, and will credit back your deposit in the 13th month of service. Keep in mind that's 12 straight months, with the clock restarting any time a service suspension occurs.

Let's look at the deposit requirements by cell phone carrier:

AT&T has the highest initial deposit, usually $250, and as high as $750. If you have bad credit and want a cell phone, AT&T shouldn't top your list.

However, if you want rollover minutes, know a ton of people on AT&T, or want a specific phone, it might be worth the extra savings to get AT&T even with a deposit. You do get  your deposit back after 13 months, provided you've made on time payments with AT&T.

If all else fails, you can get unlimited talk and text prepaid with AT&T for $60, and most cell phones come with an airtime credit.

Verizon Wireless' credit requirements are about the same as AT&T's, but with a starting point of $125, and then heading to $400 and beyond. If you don't like Verizon's answer when it comes to cell phone deposit requirements, don't bother checking with AT&T.

Once again, you get your deposit back after 13 months, and the $125 deposit might not be so bad if you want the latest phones on the Verizon network, and you can use the opportunity to help build your credit. 

Remember, it's only a credit check, and that won't hurt your credit score if you check one or two different cell phone carriers. It does pay at times to shop around.

Before the Sprint/Nextel merger, Nextel had one of the toughest credit policies around, with deposits as high as $1500, until it introduced its account spending limit (ASL) program, which allowed for lower deposits, but if your account balance reached a certain amount, your phone would suspend itself, awaiting a payment on the account.

After the merge, ASL accounts were allowed by both Sprint and Nextel subscribers, leading to the lowest of deposit amounts, typically $50 - $125. However, once you are an ASL customer, it's really difficult to get removed from the account spending limit program. Make sure you understand what your limits are and consider if it's going to fit your needs as a cell phone subscriber; sometimes ASL doesn't allow for international long distance rates or roaming, or allow you to purchase premium content on your account.

T-Mobile is probably the 'go to' cell phone company for bad credit cell phones, as there is no deposit requirement for T-Mobile. Instead, T-Mobile has opted to offer their customer two different types of plans, called FlexPay.

Flexpay offers contract accounts to customer's of a certain credit class, giving you a discount on your cell phone in return for a two year agreement. If you don't qualify for FlexPay, you have the option to do a month-to-month plan, but you have to pay full price for your equipment. On monthly FlexPay, they even give you a discount on the service. However, once you're on a monthly plan, count on getting no discounts on a cell phone, and you cannot move to a contract plan if your credit improves without getting a new cell phone number.

No matter what your credit class, cell phones are still a luxury item, costing subscribers nationwide about $50 a month. If you don't really need a cell phone, then there is no need to even apply. There is a growing number of no-contract options for people who don't need a contract and don't mind paying a bit more up front for the ability to walk away, listed here.

Remember, if you get a contract phone, deposit or not, and default on your payments, your credit score can be further affected. Cell phone carriers do not report positive credit, like a loan or credit card, but only when your account is forwarded to a collection agency.