I think that everyone can agree that the executives in charge of Equifax should be put on trial and sentenced to decades in prison. Instead, they’ll walk away free, someone will make a Big Short-style movie based on the story, and we’ll all stew on the couch in our own anger and helplessness, forced to keep our credit reports frozen for constant fear of identity theft. The timing of Equifax’s Big Hack couldn’t be worse for people who want to buy the brand new iPhone X through Apple’s iPhone Upgrade Program this year. If you did the responsible thing and froze your credit at all three major bureaus, there’s a chance that you won’t be able to upgrade your iPhone.
Not familiar with the iPhone Upgrade Program? Basically, you go into an Apple Store and buy a new phone, except instead of paying $1,000+ upfront, you can pay monthly over the course of twenty-four months. After month twelve (or the equivalent of twelve payments), you can upgrade your old iPhone for the latest model. If you decide to keep the old phone, you’ll own it outright after twenty-four payments.
Behind-the-scenes, though, the iPhone Upgrade Program is actually just a short-term, zero-interest loan granted by Citizens One Bank. And not only do you have to get a hard credit check when you first apply, but Citizens One reserves the right to do a hard credit check every year that you decide to upgrade.
According to a Citizens One spokesperson, existing iPhone Upgrade Program customers may or may not have their credit checked when they go in for an upgrade. That’s because, when you upgrade, you’re technically paying off your prior loan by trading in your old phone and opening a new loan for the new phone. If your froze your credit reports, Citizens One will be unable to check your credit. This applies to both new sign-ups and existing customers – despite the FTC website saying that existing creditors listed on your credit report should be able to access your report regardless of a freeze.
The Citizens One spokesperson pointed me to the Upgrade Program FAQs, which state that “Depending on your account performance and transactional history in the iPhone Upgrade Program, Citizens One may approve your new loan application without your credit being affected.” There are no further details about how, exactly, you’d figure out if your credit is going to get checked, and the spokesperson told me that “there is not a way to check” if Citizens One will pull your credit report before applying for an upgrade.
I called Citizens One Loan support directly to see if there was a way they could check on the backend. According to the representative I spoke to, however, you’ll rarely have your credit report pulled if you’re currently in the program and haven’t missed any payments. Additionally, she told me that it’s ultimately Apple that decides if your credit report is going to be pulled.
Next step: contact Apple support. According to support representative Calvin, the information given to me by Citizens One was correct: as long as you haven’t missed a payment, it’s unlikely that Apple will request a credit check. If you have missed a payment, it’s highly likely that Apple will pull a credit report.
While Apple Support doesn’t have the capability to check if they’ll need to pull your credit, Calvin did reveal a little “hack” of sorts. If you visit the Upgrade Eligibility page and make it through the entire process up until the checkout page, that means you’ve passed your credit check (or lack thereof). Luckily for those lusting after the iPhone X, you can go through this “hack” with the iPhone 8 now to know if you’ll need to lift your credit freeze before the iPhone X pre-order starts on October 27.
Missed a payment, froze your credit, and now want to upgrade? You’ll probably have to unfreeze your credit. Unfortunately, Calvin couldn’t tell me whether Citizens One pulls a report from all three major bureaus or just one, so it’s probably safest to unfreeze all three.
And, of course, if you’re not currently a customer in an iPhone Upgrade Plan, Apple will have to check your credit. That means that even if you were in the Upgrade Plan, and then chose not to upgrade and instead just paid off your phone, you’ll have to start over as if you’re an entirely new customer.
Once you get your fancy new phone, go ahead and use it to contact your members of Congress to demand that they hold Equifax responsible for the breach and instate new regulations that protect consumers from future data breaches. While you’re at, throw in a line about moving away from the Social Security Number as a national ID system.
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