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Telstra, Optus and Vodafone credit checks explained
Check yourself before you wreck yourself.
A good credit score isn’t the most important thing in life, but it can open some doors - and close others. If you’ve never signed up to a postpaid mobile plan or handset repayment plan before (or if it’s simply been a while since you have), you might be wondering about how Telstra, Optus and Vodafone’s credit checks actually work.
Before we break down each telco’s credit check process, a bit of background. There are three main credit reporting bodies in Australia: Equifax, Experian, and Illion. Your credit score may differ slightly between providers, which is why Aussie telcos tend to consult more than one agency to get a more comprehensive overview of your credit history.
Your credit score is essentially a history of every loan you’ve taken out, every application you’ve made for credit, how often you’ve paid your bills on time, and if there are any serious credit infringements against your name. You can check your credit score online for free once per year with Equifax, Experian and Illion, or you can use a credit check website like GetCreditScore, Credit Simple or Credit Savvy for free reports whenever you need them.
No credit check phone plans for bad credit
If you've got a bad credit score, there's no way to know if your application will be accepted or rejected until you actually apply. While it’s safe to assume that a good credit score will bode well for you, it’s important to keep in mind that black marks remain on your record longer than you might expect.
If you are rejected by Telstra, Optus or Vodafone, or if you simply have a bad credit score, it doesn’t mean you can’t still get a new phone or plan.
Most prepaid plans today offer similar value to postpaid plans, but since you’re paying for them at the start of each month, no credit check is needed. As mentioned above, even if your heart is set on a plan with Telstra, Optus or Vodafone, opting for one of their prepaid plans is a great way to get the coverage or perks you’re after without having to endure a credit check.
Outside of the big three, there’s even better value to be had. Here are the most popular prepaid plans right now.
If it’s a new phone you’re after, the best way to avoid a credit check is to either buy one of the above plans and pair it with your old device, or purchase a new device outright. If you’re on a strict budget, check out our picks for the best cheap smartphones in Australia, or pick up a refurbished iPhone for hundreds of dollars less than a brand new one.
Telstra credit checks
Telstra used to conduct credit checks for any new postpaid customer, but since the move to Upfront plans (which offer the same inclusions you’d expect from a postpaid plan, but are paid at the start of the month), credit checks are no longer needed for its SIM-only mobile plans. This is because you’re paying upfront (hence the name), and therefore Telstra has nothing to lose - if you miss a payment, you simply stop receiving your service.
That means you can sign up for any of the following plans, as long as you bring your own device.
If you do want to pair your Telstra Upfront mobile plan with a fancy new device, however, you will likely still undergo a credit check. To do this, Telstra consults all three credit reporting agencies (Equifax, Experian and Illion). No one but Telstra can tell you why your application might have been rejected, but if that’s the case, it’s worth checking your credit score on your own. Keep in mind that any overdue payment, bounced cheque or frequent loan applications may show up as a red flag on your credit report, essentially warning Telstra (and other creditors) that offering you credit could be risky. Likewise, it’s important to keep in mind that, if you are approved for a device repayment contract with Telstra, any late payments may negatively impact your credit score in the future.
Of course, you have options beyond the Big Three phone networks, and even if you have your heart set on Telstra, you could always opt for a Telstra MVNO - mobile virtual network operator - instead. Telstra leases part of its 4G network (and for Boost Mobile, the full network) to several smaller telcos, most which offer prepaid plans. Prepaid, like Telstra's Upfront plans, are paid at the start of your billing cycle, so there's no need for a credit check.
Optus credit checks
Optus uses Equifax and Illion to conduct credit checks on new customers, and since all its plans use the traditional postpaid payment method, you’ll be assessed whether you’re getting a new phone and plan bundle or simply a new SIM-only plan.
Here are the most popular Optus postpaid plans right now, all of which can be paired with a new phone or purchased as a plan only.
Like Telstra, Optus holds its credit check criteria quite close to its chest, but it’s safe to assume they’re looking for the same thing as any other creditor when assessing a potential new customer’s finances. Any overdue payments or serious credit infringements could result in a rejection, even if they occurred years ago and you’ve had squeaky-clean credit ever since.
Like Telstra, Optus also has a range of MVNOs that use the Optus network.
See the below prepaid plans that use the full Optus network, and like with the Telstra MVNO prepaid plans, don't require a credit check as they are paid upfront.
Vodafone credit checks
Like Optus, Vodafone uses Equifax and Illion when assessing prospective customers’ credit reports. And, like Optus, your credit history will be looked at regardless of whether you’re only getting a SIM or a new handset, as Vodafone’s plans are paid on a standard postpaid arrangement.
Check out the most popular Vodafone plans below. All these plans can be purchased as a SIM-only deal or bundled with a new handset.
Of our big three telcos, Vodafone’s credit check process is the most transparent. However, we still don’t (and probably never will) know the exact methodology. According to Vodafone’s website, when you apply for a phone or SIM plan with them, they may check the following information about you:
- The name of any other companies that provide you with credit, the amount of credit, and the terms of repayments of that credit.
- Any previous requests for information from other credit providers as well as the type and amount of credit requested.
- Payments equal to or greater than $150 that you are at least 60 days overdue paying.
- Any judgements made against you in court that relate to credit received or applied for by you.
- Any details about you entered or recorded in the National Personal Insolvency Index, including bankruptcy, debt agreements and personal insolvency agreements.
- The opinion of a credit provider that you have committed a serious credit infringement.
What credit score do I need for a phone plan?
Different credit agencies use different scoring systems, that typically range from 0 to 1,200 or 0 to 1,000. There are no hard and fast rules about what kind of credit score you need to get a phone plan, especially because the telcos don't provide methodology for how they accept or reject customers.
We do however know what the three main credit reporting agencies consider to be a good score and a bad score. Here's what's considered a good score:
- Equifax: 661 or better
- Experian: 625 or better
- Illion: 500 or better
And here's what's considered a bad score:
- Equifax: 459 or less
- Experian: 549 or less
- Illion: 299 or less