A year to build good faith

T-Mobile offers customers with bad credit its top phone deals

On Sunday, T-Mobile is unveiling a program that will essentially let customers with bad credit scores to prove their worthiness to the carrier and thus qualify for financing deals that would put the newest and most expensive smartphones in their palms.

Today at [company]T-Mobile[/company], the latest and greatest smartphones aren’t available to customers. Technically anyone can buy a new iPhone 6+ or the newest Samsung Galaxy if they’re willing to pay the full cost of the device, but if you wanted to spread the cost of a $750 smartphone over two years then you need good credit — carriers call that “well qualified” — to qualify for T-Mo’s financing program.

Under the new program called Smartphone Equality, any customer on a voice prepaid or postpaid voice plan that maintains their service or pays their bill on time for 12 straight months will become eligible for all of T-Mobile’s smartphone financing deals. So even if you’re on the most basic feature phone plan, if you make 12 months worth of payments on time, you can immediately upgrade to, say, the iPhone 6+ for $0 down and monthly payments of $27.08 for two years. You can even use the program to finance a tablet.

The program is also retroactive, so if you’re already a T-Mobile customer with a year of on-time payments behind you, you’ll immediately be eligible for the program Sunday. In an interview, T-Mobile VP of customer loyalty Matt Staneff also pointed out that you don’t lose your Smartphone Equality status, so if you finance that iPhone 6 and are late on a payment two months later, T-Mobile won’t suddenly insist you pay the full cost of the device.

About 63 percent of American consumers do not have the highest credit score, which is generally the bar that T-Mobile and other carriers have applied to their most compelling offers, Staneff said, though he didn’t reveal what T-Mobile’s specific credit policies were. Smartphone Equality basically lets T-Mobile make its own internal judgments on a customer’s credit worthiness rather depend on outside reports, Staneff said.

“I wouldn’t call it a credit program,” Staneff said. “I’d say we’re building trust together with our customers.”

Though this program will qualify a lot of postpaid customers for financed smartphones they wouldn’t normally be eligible for, Staneff said he anticipates it will move a significant amount of prepaid customers into the postpaid category. While many customers prefer prepaid, he said, there are a lot who were forced into a prepaid plan because of bad credit or they refused a credit check. “This is a very simply to way to get them the product they want,” Staneff said.