Is it worth the trouble?

[Sherman901]

I'm looking to switch to an Incredible and I probably would have by now if I didn't have to pay a massive deposit to Verizon. I have an iPhone right now and I'm good with paying my bill but the bill is under my dad's name. We've recently hit some rough spots and neither he nor my mom have good credit anymore so I'm going to have to pay a deposit that way. I found a friend that's willing to open a line up for me under their account but I've been thinking recently....

Is it worth it to open my own account paying a $400 deposit? Then, if I understand it correctly, I'll get that money back at the end of a year on the contract. Would you pay that much to get your hands on an Incredible? I need to improve my credit because I don't have any credit right now and I'm thinking this could be an opportunity... but at the same time, that's a shit ton of money. It'd be $400 for deposit, $200 for the phone, $35 for the activation fee plus $130 for the ETF from AT&T. What do you guys think? Is it worth it?

 

[colnago]

Is $600 out of pocket worth it? Depends on your situation and your goals. However having a phone account may not help your credit, as much as it can hurt it, if you start missing payments and or having the account go into collections, etc. (timely payments may not be reported).

That $400 can go towards paying for a year's worth of voice/data on your parents' plan. If you do not have a credit history now, you would be better served establishing a "secured/unsecured credit card" or a secured debt (car payment).

 

[JoePT]

If you're fine with your iphone and have no coverage issues, why switch? For the phone? Not a big deal in my opinion. But that's just me.

 

[vzwuser76]

Is $600 out of pocket worth it? Depends on your situation and your goals. However having a phone account may not help your credit, as much as it can hurt it, if you start missing payments and or having the account go into collections, etc. (timely payments may not be reported).

That $400 can go towards paying for a year's worth of voice/data on your parents' plan. If you do not have a credit history now, you would be better served establishing a "secured/unsecured credit card" or a secured debt (car payment).

I believe even if he bought the Incredible outright, he'd still have to pay the deposit. The deposit is about establishing service, not about the phone. We were going to separate our family plan (splitting 4 lines into two separate accounts) and my brother has spotty credit (hence why he is under me) and they required the deposit for that. He had upgraded his phone several months prior so a phone upgrade was not an issue. But if the OP did pay the deposit, as a new customer he would be eligible for 2 year contract pricing ($199).
My advice is if the service/signal is significantly better with Verizon, then you should consider it. If the two carriers are about the same and you're main reason for switching is the phone, I would say no. I'm no fan of AT&T (no serice within 200 miles here) or Apple (just had my 2nd iPod crap out on me, both after about 20 months), but that's alot to pay for a few extra features. Of course there are quite a few Verizon customers on here who paid full retail (around the same price as the deposit + the phone cost) to upgrade to it. Don't know if this helps or not but it really comes down to what you want.

 

[barrister89]

The problem is that if you have no credit history, you are considered as much of a risk as if you had a poor credit score. I'm not familiar with VZ's policies, but I assume the deposit is returned if you comply with your contract. Unfortunately, having a cell phone contract does nothing to improve your credit because the carriers don't report to the bureaus unless the account goes to collections. In other words, they don't report positive information that you're paying on time like the credit card companies and auto lenders do.

I you want a free copy of reports from all three bureaus (Equifax, Trans Union & Experian) there is a government website www.annualcreditreport.com that entitles you to a free set each year. Check your reports and make sure there is nothing negative on them.

If you want more information about credit reporting and the federal laws that help you keep your reports accurate, the Federal Trade Commission provides information to consumers.

Your Access to Free Credit Reports

 

[iowabowtech]

Stick with the Iphone. Too much effort and money required for that deal. If you wanna improve your credit get one credit card with a low cap and buy a few minor things on it each month and immediately pay them off. Spend only the money you immediately have to pay it off with.

 

[esn]

THey pay interest on the deposit so think of it as a savings account. As far as switching its up to you. Do you get good reception with ATT? If not get the incredible for sure.

 

[barrister89]

Another tip if you are young and trying to establish credit is to form a relationship with one of the smaller independent banks or credit union. Keep your bank accounts there and don't overdraw them. These smaller institutions are eager for more customers and will often try harder get you approved for a credit card or car loan.

Getting a credit card with a small limit will help but be careful. Many have high annual fees and all sorts of fish hooks like huge late fees or overlimit fees. Most of the issuers of these cards are bottom feeders who will take advantage of folks with credit blemishes.

I help people with their credit reports in my business and it has made me sort of a credit evangelist because I see so many clients who ruined their credit score by failing to pay a couple of $50 medical bills. Learn about the credit reporting system and the Beacon Score. It is not rocket science and anyone who can program and tweak an Inc can certainly google and educate themselves about how to maintain creditworthiness. In this economy, if you don't have at least a 650 score most lenders will decline you, or slap you with a high interest rate. You certainly will not be approved for a mortgage. Not a bad idea either to sign up for one of the services that allow you continuous access to your reports. I cannot count how many times someone has come in and had collection accounts or judgments on their reports that they had either paid or were erroneous, and that can be easily removed by filing disputes under the Fair Credit Reporting Act.

 

[Jim Chapman]

If your financial situation is tight, spending a big chunk of $$ on a gadget you don't need does not seem like the smartest move.

 

[colnago]

I believe even if he bought the Incredible outright, he'd still have to pay the deposit. The deposit is about establishing service, not about the phone...

Right. $400 deposit + $200 phone = $600 out of pocket.

I was only suggesting that if the Incredible "had" to be purchased, it would be less expensive as an add-on to an existing plan...with the $400 required as deposit on a new account better spent elsewhere.

 

[BetterMost]

no no no Please keep your Iphone babe, its not worth it.