This post comes from Gerri Detweiler at partner site Credit.com.
You know that your credit will be checked if you apply for a loan. But did you know a credit review may also be required to get cable, Internet or television service?
In fact, a credit check is routine when you apply for these services and it’s just another example of why it’s so important to review your credit reports to make sure they are accurate.
What’s the logic behind this practice? It’s pretty simple, really. When you sign up for cable, Internet or TV service, you typically get equipment that can be pretty pricey, such as a cable box and/or modem.
In addition, you pay for the service after you’ve used it. You can often run up a “tab” of a few hundred dollars in services and equipment before you make your first payment. If you don’t pay, the company will have to try to collect, which can be costly. A credit check helps them identify which customers may have difficulty paying their monthly bills.
Here are the credit check policies of some of the major providers:
A credit check is required for all AT&T products, including U-verse TV and Internet service. All three major consumer reporting agencies – Equifax (including the National Consumer Telecommunications Utility Exchange managed by Equifax), Experian and TransUnion — are used for these reviews.
An AT&T spokesperson said that if prospective customers have credit problems, the company will work with customers in various ways to help them receive service, which can sometimes include upfront fees. Customers can check with an AT&T representative to determine their options.
Certain products or services may require a credit check, but Comcast says it will notify customers before requesting their credit. They use Experian and Equifax for screening, and it does generate a hard inquiry, which can result in a small, temporary drop in your credit score.
The company did not respond to our requests for information. However, the front page of its website currently states, “A credit check and/or deposit may be required.”
Time Warner Cable
A company spokesperson says Time Warner Cable is in the process of migrating to a policy of requiring a credit check for all new customers, and is also in the process of migrating to a “soft inquiry” that won’t affect credit scores. Experian will be the provider of credit information.
Credit information is used primarily to help verify a customer’s identity and to determine what amount of deposit is appropriate (typically $50). Customers will not be turned down for service based on their credit.
A credit check is required for all new customers, and will create a hard inquiry on the credit report used. Verizon works with all three major credit reporting agencies and, according to a company spokesperson, will check “sequentially, stopping at the first with information.”
Credit checks are not used to decline customers, but to determine the amount of the deposit, if required.
Of course, there’s another way these services can affect your credit: If you don’t pay your Internet or cable bill your account will be turned over to collections and that will definitely hurt your credit.
However, by monitoring your credit, you can keep on top of how you’re doing, and you can be alerted to any problems before they become bigger problems. Credit.com has a free tool that can help you do that, as it gives you two of your credit scores and an overview of your credit report, updated every month so you can track your progress.
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