Back when people first starting getting the Internet in their homes, it was usually dial-up. You had to essentially hook your computer’s modem up to the home phone line, dial in and the pay-off was SLOW browsing online. Thankfully, broadband and wireless technology has put the old dial-up Internet access out to pasture. In fact, broadband Internet access is no longer a luxury, it is a necessity. With people going online to do business, attend classes and pay their bills, it is no longer possible to keep up with the busy world that we live in without broadband access.
But the fact remains that some people have tough time paying their bills every month, without even considering the additional costs of getting broadband coverage. Still, millions of people are making cuts where necessary, so they have enough in the budget to pay for broadband Internet access. The problem is, though, that many people with less-than-perfect credit may be paying a lot more for this necessary service than people with higher credit scores are paying.
This all comes hot on the heels of a study that was recently conducted in the U.K. that showed that families with lower credit scores are paying more for monthly broadband Internet access. This research was conducted by a professor on staff at the Cranfield School of Management. The study showed that people with low credit scores are sometimes charged double what people with high credit scores are charged.
The study also turned up some additional, equally troubling information with regards to subprime credit and mobile phone costs. It turns out that people with lower credit scores also paid more for mobile phone coverage contracts and finance charges, on top of their higher costs for broadband access. We can all agree that mobile phones, like broadband Internet access, are necessities these days. And it looks like people with low credit scores are getting the short end of the stick where mobile phone coverage is concerned too.
The author of the research study, Dr. John Glen, a senior lecturer, indicated that low credit scores are costing consumers billions of dollars in additional charges. Dr. Glen said, “Those with poor credit are being charged more than twice as much.”
This particular study was relevant to people living in the U.K. However, it appears that things are pretty similar here in the good old United States of America. Recent studies conducted in the U.S. have shown that people with lower credit scores are paying more for much needed services and access. It is fair to mention, though, that household expenses are a bit different in the two countries. For example, U.S. households typically pay more for Internet access than British households do.
All of the results for this eye opening study were gathered from mid-income households over the same period of time. The study included households that ranged from having poor credit all the way up to families with very high credit scores.
It appears that the extra charges come – in part – from the cost of equipment that is put in place to deliver broadband Internet access. There is also the fact that unpaid bills were higher in homes with lower credit scores, which may explain why Internet Service Providers consider households with lower credit scores to be riskier to provide monthly coverage to. There are lawmakers currently looking into this issue, with the goal of making things a bit more affordable for all consumers, especially people with low credit scores.
If anything, this information should serve as yet another great reason to avoid having a subprime credit score.