You want an Apple iPhone but have less than perfect credit. Are you completely out of luck? Not necessarily.
There are ways to finance an iPhone even if you have bad credit. Or it could be in your best interest to consider other financing options that don’t require a credit check.
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What are the Usual iPhone Payment Plans and How Do They Work?
It depends on your phone carrier. Most require a down payment, and you’ll make equal monthly installment payments for up to 36 months to cover the remaining balance. However, some carriers don’t require a down payment and only request that you cover the taxes at the point of sale or during the first billing cycle.
You can also lease an iPhone for a 12 to 18-month period from T-Mobile if you’d prefer more affordable monthly payments. Then, when the lease term ends, you’ll have the option to purchase the phone if you wish to keep it. Or you can turn it in if it’s still in good condition and select another phone.
Another option to finance your iPhone is through a buy-now-pay-later platform, like Affirm or Klarna. However, be mindful that you’ll generally be limited to refurbished devices in some instances.
If you decide to buy an iPhone directly from Apple, there are two primary financing options:
- Apple Card: It operates like a traditional credit card, and you’ll be on the hook for the minimum monthly payment (which includes a small percentage of the principal balance and interest). You can earn 3 percent cash back on Apple product purchases and 2 percent on all other purchases when you use your Apple Watch or iPhone at the point of sale.
- Apple Card monthly installments: Select the monthly installment option when you checkout at apple.com, at an Apple Store or on the Apple Store app. The amount you spend will be added to your Apple Card balance, and you’ll earn 3 percent cash back on the purchase. Plus, you won’t pay interest on qualifying Apple purchases.
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Factors Cell Phone Companies Consider When You Apply
- What’s your credit score? Is it on the higher or lower end?
- Do you pay your bills on time? Can you afford your outstanding debt obligations, or are there late payments, collection accounts and charged-off accounts that indicate otherwise?
Length of Credit History
- How long have you had credit? Do you have a track record of responsibly managing your debt obligations?
Amount of Credit
- How much do you owe lenders and creditors? Is it an acceptable amount compared to your income, or are you overextended?
What Credit Score Do You Need to Finance an iPhone?
You’ll generally need a credit score of at least 600 to qualify for iPhone financing. This requirement could be different for other carriers, though, and you could be approved if there are other factors that compensate for the lower score.
In the meantime, consider working towards better credit health to avoid being turned down by lenders and creditors in the future.
Will a Financing Application Affect Your Credit Score?
Each time you apply for financing, whether it’s a loan or credit card product, a hard inquiry is generated. Your score may dip by a few points, but the impact is typically only temporary. Hard inquiries only impact your credit score for up to 12 months, and they fall off your credit report within two years.