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Stuck With Bad Credit Score? T-Mobile Offers Some Relief

Advertisers have teased American consumers forever with deals too good to be true and today’s boasts are more enticing than ever: Zero-percent financing on a new car and some credit cards; mortgage loans less than four percent; cell phone service whenever and wherever you need it for $50 a month.

There’s just one problem: Most consumers don’t qualify for any of those deals because of their credit scores.

According to the 2015 Corporation for Economic Development study, 56 percent of American consumers can’t take advantage of the best deals that home builders, car companies, banks or even cell phone companies are offering because they have what is known as a sub-prime credit score.

A sub-prime credit score is one in which consumers with serious credit card debt, mortgage debt, car loan debt – or all three! – are exposed to high interest rates (prohibitively high in some cases) or are locked out of the traditional credit market altogether.

In numeric terms, a sub-prime score would be any score under 640. Anything under that and you’re probably going to get the least attractive rates available for home loans, auto loans, credit cards, etc.

T-Mobile To The Rescue

That doesn’t mean that businesses are going to lock 56 percent of their potential customers out of the store. There are plenty of banks, builders and car dealerships willing to help consumers with credit solutions, but only after you have improved your credit score. In other words, expect higher interest rates and longer terms while you work to get out of debt.

T-Mobile, however, is going in a completely new direction to offer hope to people with bad credit.

T-Mobile, the fourth largest cell phone company in the U.S., has an incentive plan for those trying to rebuild their credit: Make 12 consecutive on-time monthly payments and you qualify for their best rate plan, regardless of your credit score history.

The program, called Smartphone Equality, could apply to as many as half the company’s 57 million customers, who company executives admit could not qualify for their best offers because of low credit scores.

Payment History Matters More

“We put a lot of value in the relationship you’ve built with us,” Katie Recken, Senior Communications Manager at T-Mobile said in an e-mail response to “The fact is, your payment history is the best way to tell if you’ll make future payments on time so this is a great move for our customers for fairness and for our bottom line.”

T-Mobile started the program in January and grandfathered current customers in immediately. Recken said the company will not do credit checks on customers who make 12 consecutive on-time payments. Once qualified, customers will get the company’s best pricing on phone, tablets or any other devices and retains the preferred status as long as they stay with T-Mobile.

“The wireless bill has become a bellwether for credit worthiness,” Recken said. “Most Americans wouldn’t even qualify for the carrier’s advertised deals so they end up paying more up front and over time.

“We believe everyone should have a path to our best pricing. U.S. wireless carriers base their decisions on data that has been scraped together from your distant past and sometimes use only that to judge whether you’re ‘Well-Qualified’ even if you’ve been paying your bill for years. You’re not just a credit score at T-Mobile.”

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

Happy man with a new cellphone.

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    1. Brooks, J., Wiedrich, K., Sims, L., Rice, S. (2015, January) Excluded from the Financial Mainstream: How the Economic Recovery is Bypassing Millions of Americans. Retrieved from
    2. Pagliery, J. (2015, January) T-Mobile says bad credit means half of customers don’t qualify for deals. Retrieved from
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