What’s the Minimum Credit Score Required to Get a Mobile Phone Contract in Canada?

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Recent studies have shown that Canada has one of the world’s highest mobile phone usage rates. More than 98% of the population between the ages of 18-29 and 95% of those aged 30-49 own a smartphone. That means that at some point, nearly every Canadian adult has applied for a mobile phone contract or plan. These contracts lock in a monthly price for several years, and can come with incentives such as a free phone upon signing. One critical component of getting approved for a phone plan is your credit score. What credit score is needed to get a mobile plan in Canada? In 2023, the minimum credit score for a mobile phone contract in Canada is 650. 

That’s right, even though having a mobile phone has become a necessity, you will still need a pretty high credit score to qualify for a contract. What exactly do we mean by a mobile phone contract? These are the plans you sign up for as a new or returning customer. Back in 2015, the Canadian Radio-Television and Telecommunications Commission, or the CRTC, changed the maximum length of cell phone contracts to 24 months, rather than 36. Once the 24-month mark is hit, Canadians can cancel their cell phone contracts with no penalties.

As mentioned, signing a contract can come with some great perks.  In Canada, when you sign a mobile contract, carriers often offer a free phone as part of the deal. As we all know, these phones can cost $1,000 or more, so getting this for free can offset the monthly fees you are paying for cell phone services. We can think of this phone as a loan from the telecom company: each month you pay back some of the value of the phone plus the cost of your services. If you do not get approved for a phone contract, you usually have to purchase your own phone which will come with a high upfront cost.

For 24 months Canadians are locked into a contract with one of Canada’s telecommunications giants. So why do you need a good credit score to qualify for a mobile phone contract in Canada? This article will discuss why telecom companies ask for your credit score and what you can do if your credit score is lower than 650. 

Why Do Phone Companies Ask for Your Credit Score?

For most Canadians, your credit score isn’t something you know off the top of your head. There are two primary credit bureaus in Canada, Equifax and TransUnion. Given the exact formula these companies use for calculating your credit score differs, you will often find different scores between the two bureaus. Both companies offer free credit reports online, allowing you to check in on your credit whenever you want.

So why do phone companies require your credit score? Your credit score is a measure of your creditworthiness, which means how likely you are to be able to pay off a loan or in this case, your mobile phone contract. If you have struggled to pay off other bills or loans, then it will show in your credit score. In Canada, a credit score below 650 is a red flag to mobile phone providers. 

Does this mean that Canadians with a credit score below 650 cannot get cell phones? Not at all! There are plenty of ways in which Canadians with a lower credit score can still get a mobile phone plan in 2023.

How to Get a Mobile Phone Contract in Canada with Bad Credit

In Canada, Equifax defines a good credit score rating as any score that is 660 or higher. For most lenders, a credit score of about 560 is considered to be bad and at high risk of not being able to pay back a loan. As you can see, it is a fine line between what is considered a good and bad credit score in Canada. 

More than 5 million Canadians or about 12% of the population have “bad” credit scores. Yet more than 95% of Canadians have a mobile phone. If you are one of those with bad credit, fear not. There are several ways to get a mobile phone with bad credit in Canada.

One of them is to get a credit card for bad credit in Canada. These cards are specifically designed to help those who are struggling with their credit scores. Some examples of credit cards for people with bad credit include guaranteed approval cards, prepaid credit cards and secured credit cards. These can be lifesavers for people with bad credit and a great way to build up your credit score before applying for a mobile phone contract. 

Even without a credit card for bad credit, there are still several ways to get a mobile phone with bad credit in Canada. Most of these methods do not help improve your credit score directly, but they can help you work on managing your finances while still reaping the benefits of owning a mobile phone.

Family Plans

Believe it or not, one of the easiest ways to get around having a low credit score is to sign up for a family plan. These plans are designed to provide a group discount for families or a group of close friends. When it comes to family plans, only the primary account holder’s credit score is of importance. If you can find a family member or friend who is willing to share the plan with you, this might be the best option while your credit score is low. The primary account holder is charged for all accounts in the plan so you will likely need to organize some way to repay them each month. The primary account holder can pay monthly bills by credit card, cash, cheque, or pre-authorized payment through their financial institution.

Family plans, or shared data plans, are typically offered by larger providers like Rogers, Telus, and Bell. Often the smaller providers like Koodo or Chatr do not have family or group plans because they are focused on individual and prepaid plans. 

There are a couple of things to note with family plans. First, if the primary account holder ever wishes to leave the family plan or change to an individual plan, you will not have a say in the matter. Second, while you are a part of the family plan you will not be able to build credit by paying your bills on time, as the contract is under the primary account holder’s name. As long as you understand these things, a family plan is the best way to work around getting a mobile phone with a low credit score in Canada.

Prepaid Plans

Prepaid plans are another way to avoid the problem of a low credit score. With these plans, you pay for your services upfront, which means the provider has no concerns about you not being able to pay your bills. This also means that you are limited to the number of minutes, text messages, and data that you have paid for. The best prepaid phone plans in Canada can provide you with everything you need including talk time, data, SMS messages, and long-distance calling. 

If prepaid plans are an option for you, then you’re in luck. Almost every provider in Canada will offer a prepaid plan to those who need them. 

Mobile Service ProviderPrepaid Plan Pricing 
Rogers WirelessMonthly rates range from $15 to $55
Semi-annual rates range from $150 to $225 for 6 months
Telus Mobility Monthly rates range from $15 to $55Annual talk and text only for $100
Bell MobilityMonthly rates range from $15 to $55
Freedom Mobile Monthly rates range from $15 to $35
Annual rates range from $129 to $179
Virgin Mobile Monthly rates for talk plans start from $15
Monthly rates for data plans start at $30
Pay-per-minute plans range from $15 to $28
Annual talk and text only for $100
Fido Monthly rates range from $15 to $75
Semi-annual rates range from $150 to $225 for 6 months
Annual talk and text only for $100
Lucky Mobile Monthly plans with 3G data range from $15 to $70
Monthly plans with 4G data range from $30 to $75
Public Mobile Monthly rates range from $39 to $80
90-day rates range from $45 to $65 
Chatr Wireless Monthly plans with 3G data range from $25 to $70
Monthly plans with 4G data range from $30 to $75
Monthly talk and text plan for $15
PC Mobile Monthly rates range from $20 to $50
Koodo MobileMonthly rates range from $15 to $75

Like family plans, prepaid plans do not build up your credit even if the account is under your name. As for the phone, you will either have to pay for the phone upfront as well or bring your device, which is usually a more affordable alternative. In terms of paying for your prepaid plan or topping up with more minutes or data, you can log in online and pay via credit card or debit card. Alternatively, you can head in person to a kiosk or store and top up your services with cash, debit, or credit. 

Credit Limit Plans

Credit limit plans are underutilized in Canada, but they can help you out if you have a bad credit score. What is a credit limit mobile plan? With these plans, you will receive your device with a credit limit. Each month, you use your device and pay your bills without going over your limit. If you do go over your limit, the provider can stop your services until you have paid your credit back down through credit card, debit card, or cash to get back under the limit. 

Who offers credit limit plans in Canada? Most of the big providers have a credit limit service including Bell Mobility, Telus, and Rogers. Even smaller providers like Virgin Mobile and Koodo offer these services to help Canadians. If you find you are not being approved for standard mobile plans in Canada, consider using one of these credit limit plans to get started. The most common credit limits start at $200 to $300 depending on the provider.

Unlike family plans and prepaid plans, credit limit plans help you build up your credit score. Since the account is under your name, it will count towards improving your financial standing and help you end the cycle of poor credit. For those who are looking to raise their credit score, this is the best option in Canada.

Use a Cosigner

The last option is to find someone that will vouch for your ability to pay off your bills each month. A cosigner is someone willing to take on your payments if you default on your mobile contract. They would have a good credit score for them to be approved as a cosigner. This type of plan does not improve your credit score. If you do not have a credit card, you can pay your bills with cash or debit at a retail outlet. 

How is a Credit Score Calculated in Canada?

Now that you know how to get a mobile phone plan with a low credit score, let’s look at how your credit score is even calculated. In Canada, a majority of your credit score is determined by your payment history, used credit vs. available credit, the length of your credit history, and the number of inquiries in your credit file. 

The first two factors, your payment history and used credit vs. available credit, account for approximately 65% of your credit score. Simply put, if you pay your bills on time, your credit score will be good. What kinds of bills are considered? Things like credit card bills, mobile phone bills, and car payments. 

This is why paying your mobile phone bill and owning a phone can help your credit score in Canada. Using a credit limit plan can provide you with a phone and help you rebuild your credit score at the same time. 

The Bottom Line: The Minimum Credit Score for Mobile Phone Contracts in Canada

In this day and age, owning a mobile phone is a necessity. Phones aren’t just used for communication anymore, they’re used for making payments, tracking our health, and entertaining our kids. Even if your credit score is lower than 650, it doesn’t mean you are forbidden from owning a phone. As you can see, there are plenty of options for cell phone financing for people with bad credit in Canada. It’s 2023 and you need a phone, so don’t let a spotty credit history prevent you from buying one! 

Baggio Ma has written for several Canadian websites on a variety of personal finance related topics. His knowledge is informed by his personal financial journey as an investor over the past 5 years. He invests using the online brokerage platform Wealthsimple, shops with one of the best credit cards in Canada, and keeps track of his credit score through Borrowell.