T-Mobile changes its credit requirements for EIP purchases

T-Mobile changes its credit requirements for EIP purchases
When T-Mobile sells a handset using its EIP, it is taking a credit risk. Let's use the Apple iPhone 6 as an example. Those who qualify will be able to take the phone home for "$0" down with 24 monthly installments of $27.08 due. Obviously, the risk is that a customer stops making the payments, leaving the carrier high and dry.

With the large number of new subscribers that T-Mobile has been adding, Wall Street is worried about the credit quality of many of these new accounts. Considering that the competition among the four major carriers is extremely fierce, there could be pressure from one or more operators to relax their credit qualifications.

As it turns out, T-Mobile is tightening up its EIP qualifications. According to leaked internal documents, those in credit classes "I" and "Y" will no longer be allowed to purchase equipment using the installment plan, unless they have been with the company for three years or more. In the past, those in "I" and "Y" might have been considered to be "lesser-qualified" customers, and would be allowed to participate in an EIP as long as they ponied up some cash up front.

The change no doubt will make Wall Street analysts happier, but for those in credit classes "I" and "Y" might not be terribly thrilled at the prospect of paying full retail price for a new handset.


source: TmoNews

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22 Comments

1. WillieFDiaz

Posts: 127; Member since: Dec 22, 2010

You didnt just source this, you plagiarised it completely.

2. skymitch89

Posts: 1453; Member since: Nov 05, 2010

A better question is how do they determine which "class" you are in?

3. djcody

Posts: 228; Member since: Apr 17, 2013

By your credit score, you have to provide your social security number

5. Rydsmith unregistered

I think he's asking what qualifies you for what letter with regards to your credit. There are probably internal scores that the system uses and just guessing based upon a similar model that I have seen used. A: 800+ B: 700-800 C: 675-700 D: 650-675 E: 625-650 Etc... As you see th higher ratings have a much larger area due to their score typically showing how they handle credit and debt with the bottom getting pickier and pickier just because of the history of the customer and additional information such as what is causing their score to be so.

7. TheMan

Posts: 494; Member since: Sep 21, 2012

I know this is a good move by the Company. Our firm had the highest level of fraudulent purchases this year on TMO because it was so easy to obtain multiple high end devices at low cost. The phones were then sold on Craigslist or overseas.

12. bsargent1990

Posts: 2; Member since: Oct 06, 2014

Your model is incorrect. They're not directly based on credit score. I'm an employee for t-mobile

13. remixfa

Posts: 14605; Member since: Dec 19, 2008

Its a mix of both credit score and payment history with the company which is why there are so many different classes.

10. lsutigers

Posts: 832; Member since: Mar 08, 2009

Sprint did the same thing last month.

4. Rydsmith unregistered

I am completely for this move. Some may see it as anti-consumer but it is actually to assist in the risk that T-Mobile would typically have to face. This doesn't leave customers high and dry but instead ensures that the customer has the ability pay for both the phone and the plan that they are going to be on. If a customer has terrible or low credit it typically comes from not paying their bills on time or at all (which make up 35% of your FICO score) and adding a smartphone with a bill on top of it will help neither T-Mobile or the customer.

6. strudelz100

Posts: 646; Member since: Aug 20, 2014

My credit is garbage because I only buy what I can afford. Responsible spending is punished by the current financial system. I bowed out years ago.

8. Rydsmith unregistered

No, your credit is garbage because you don't understand credit. You can use credit to buy things that you can afford, it's called a credit card. I use a credit card for literally 100% of my purchases and have never paid an a penny interest or fees. It's called being responsible. Use your card not under the mentality of "I don't have to pay for this for a while" but instead "I have to pay for this." Pay your monthly statement in full and you will show responsible self finance. The system is not made to punish those that are responsible, in fact it's the exact opposite. The cards that offer the best rewards (like flights and hotels) are reserved for persons with high credit scores, the people that have showed that they can be responsible with their money. So don't blame the system for a garbage score, blame ignorance.

9. strudelz100

Posts: 646; Member since: Aug 20, 2014

Yawn. I choose not to participate fool. The fact you couldn't discern that is hilarious. I only buy things with money on hand. I don't owe anyone any money and I am not controlled by my debts. I can quit my job and downscale my lifestyle at any time I wish. Like a responsible person does, instead of spending money they don't have in the first place.

11. Rydsmith unregistered

You choose not to participate and that's OK, but don't complain about having garbage credit then. I take it bought your home out right with cash? Doubtful. You have yet to point it how exactly the system has punished you for being responsible. You can be responsible with credit but you have chosen not to. You can use a credit card to buy items and have the funds on hand in your bank account to pay off the balance at the end of month. You don't have to live outside your means to be responsible with credit. You have made a conscious decision to avoid credit because of a lack of understanding of balancing your funds. The fact that you think one can't be responsible with credit and not owned by debt while also having a strong credit score is hilarious.

15. Furbal unregistered

Credit is a wonderful thing when used properly. I get to fly damn near anywhere I want for free.

17. Doakie

Posts: 2478; Member since: May 06, 2009

I follow Dave Ramseys teachings. Studies show you spend more when routed through a credit card than actual cash being removed from your possession directly. Also he teaches that you don't need a credit rating to buy a house you just need a back smart enough to do manual under writing. I currently have zero debt and also have no credit score, and I couldn't care less.

19. DocOc78

Posts: 17; Member since: Nov 05, 2014

Then you'll have no problem buying a new phone at full retail price instead of on EIP. You should be proud.

14. mikewillz

Posts: 52; Member since: May 03, 2013

Hello AT&T

16. Slammer

Posts: 1515; Member since: Jun 03, 2010

This proves my point. Tmobile is attracting the customers that AT&T and VZW don't want. John B.

18. hitechredneck

Posts: 103; Member since: Nov 21, 2011

How is paying full retail price attracting customers?

20. asrr62

Posts: 56; Member since: Sep 14, 2011

they are attracting people that dont want verizon or att&t. you have it bakwards. now continue paying verizon for the right to not root your phone. congratulations. your paying for someone to control you.

21. hitechredneck

Posts: 103; Member since: Nov 21, 2011

Number one I don't pay verizon. Second my backflip is unrooted while it was on at&t. Don't make assumptions.

22. Gsmalltheway

Posts: 277; Member since: Aug 15, 2009

I work at ATT. To be available for NEXT off the bat you have to have an A or B credit rating. So about a 720, existing customers qualify with a C rating

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