What if you could have an awesome new phone and you didn’t even know it?
Many people want to grab hot new smartphones like the iPhone X. However, they worry that poor credit will keep them from making that dream come true.
Fortunately, it’s possible to get bad credit iPhone financing even with a poor credit score. Keep reading to discover how to get started!
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What Is “Bad Credit?”
We’ve put together a thorough guide to getting an iPhone even if you have bad credit. But what if you don’t even know if your credit is bad? This is why it’s important to understand your credit score.
Your credit score is represented by a number between 300 and 850. An 850 score represents perfect credit, but most people are nowhere near that number.
An average credit score is usually between 620 and 670. Truly “bad” credit is typically defined as a score beneath 500.
Before you go to snag a bad credit iPhone, it’s important to understand what drives your credit score down.
What Drives Credit Scores Down?
If you’re wondering what may be driving your credit score down, the answer is “lots of things.” Your credit score is actually a complex calculation that can be affected by many different factors.
The most common factor is late payments. When you don’t send payments in on time or they go into collection status, your credit takes a hit.
Major purchases can actually drive the score down, too. Even those with good credit will see that credit drop after they buy something like a new car.
Some surprising things affect your credit, including canceling old credit cards and even applying for new ones. Bankruptcy can also drive the score down and even continue affecting it after you settle your debts.
How Can I Improve My Credit Score?
Sometimes, the best plan is to boost your credit before you try to finance an iPhone. In that case, you should know some of the key ways you can drive your credit score higher.
First, try to keep balances as low as you can on certain cards. You can also request a raise in your credit limit to effectively lower how much credit you are using on that card.
Second, stay on top of your credit using free monthly credit monitoring. Don’t forget to report suspicious activities and dispute mysterious charges.
Finally, try to stay on top of your payments. Switch to automated payments whenever possible and set payment reminders for anything you cannot automate.
Now that you know your way around a credit score, it’s time for the fun part: buying that iPhone!
First Party Financing
Believe it or not, most people do not buy their iPhones outright because they are so expensive. Instead, they seek financing directly through the cellphone provider.
If you are willing to sign a multiple-year contract with the carrier, you can usually get special financing on the phone. However, the carrier may still want you to put a certain amount of money down before financing begins.
You may also be able to pay for the phone via a separate installment plan. Either way, going directly through the cellphone carrier may be the best way to finance your phone if you have poor credit.
This is because existing customers who are in good standing with the company may be likelier to be approved regardless of credit.
Third Party Financing
If you do not want to (or cannot) finance through your cellphone carrier, you may consider third-party financing. This is where you finance your iPhone through a company such as Wal-Mart or Best Buy.
Such stores do not make you sign any kind of contract agreement with them. Instead, they will have you finance the phone through an in-store credit card.
There are typically deals where you pay zero interest on this purchase if it is paid off in a certain amount of time (such as 16-24 months). However, the interest is often quite high (over 20%) if you fail to pay everything off.
On the bright side, these high-interest rates make it easier for you to get approved even if you have bad credit. And that may be what you need to get the iPhone you’ve been dreaming of.
We’ve gone over your major financing options. However, there are variations of these plans that may work better for you, including paying more upfront.
Financing an iPhone is similar to financing a car. If you are willing to pay more money upfront, you make it likelier that the dealer will approve your financing.
So, let’s say your carrier wants you to pay $200 up front. If you are willing to pay $300 or $400, it may be enough to get them to approve financing despite your credit score.
Phone financing is similar to other forms of financing. That means you have the same emergency option: getting a cosigner.
As with loans, getting a cosigner means that both of you are responsible for making payments on what is purchased. That is why many people are hesitant to say “yes” to cosigning.
The upside is that with a cosigner, you get to benefit from their credit. Having someone with good credit cosign your plan, no credit check loan, or credit card may be enough to get the approval you need.
Which Option Is Best?
So, now that you know your options, one question is left: which option is best?
The truth is that it depends on your existing situation. If you are a loyal customer in good standing with your carrier, try seeking their financing first. If not, try seeking third-party financing.
Unless you have very accommodating family or friends, consider getting a cosigner for your iPhone an emergency scenario.
Bad Credit iPhone Financing: The Bottom Line
Now you know more about bad credit iPhone financing. But do you know who can put cash directly in your hand?
Here at Bonsai Finance, we specialize in helping those with poor credit realize their dreams. To see how a payday loan can help you get an iPhone X, just apply online today!