A phone contract without a credit check depends on the provider. Whether a provider checks creditworthiness before signing is its own decision. This guide explains which contract types exist, which risks prepaid balances carry and what you should check before you sign.
Short answer: Whether a provider runs a credit check before signing is its own decision. For prepaid contracts, a permissible clause can provide that a balance goes negative and must be settled. The Federal Court of Justice (BGH) decided this in 2014. The contract terms are therefore decisive. Last updated: November 2026.
The most important points in brief
- The provider decides whether a credit check takes place. The contract terms show this.
- For prepaid contracts, a negative balance can be permissible if the clause provides for it.
- Additional payments can arise mainly for roaming, premium services and value-added services, if the contract clearly states this.
- A tariff without a check is not automatically cheap. Base fee, usage prices and extra costs decide.
- Before you sign, read the clauses on negative balances, additional payments and termination carefully.
Which contract types exist?
In mobile telephony, a simplified distinction is made between two basic forms. With a contract billed monthly, usage is invoiced afterwards. With a prepaid tariff, usage is paid from a balance that was topped up in advance.
| Contract type | How usage is paid | What to check |
|---|---|---|
| Contract with monthly bill | Billed afterwards | Credit check, term, notice period, extra costs |
| Prepaid with balance | Topped up in advance, usage is deducted from the balance | Negative-balance clause, notices on additional payments, validity of the balance |
Whether a provider checks creditworthiness for a prepaid tariff, or waives it for a contract with a bill, is its own decision. Ask concretely before you sign and request the answer in writing.
Which risks arise with balance models?
In its judgment of 9 October 2014 (case reference III ZR 33/14), the Federal Court of Justice (BGH) decided that a clause is permissible under certain circumstances. According to it, a prepaid balance may go negative, and the customer must settle the negative balance without delay. The Verbraucherzentrale NRW had sued because it saw the purpose of prepaid contracts endangered by threatened additional payments.
The case concerned a provider without its own network. Billing data therefore arrived with a delay from the network operator. Customers could use services even though their balance was already used up. The BGH found no unreasonable disadvantage for prepaid customers in this.
- Additional payment for a negative balance, if the clause provides for it.
- Additional payment for roaming, premium services or value-added services, provided the contract clearly points to this.
- Delayed billing, through which services can be used beyond the balance.
The judgment is final. It concerns the specific clause of the case decided. How your contract is worded can only be seen in your provider’s documents.
What role does the credit check play?
A credit check is meant to help the provider assess the risk of payment defaults. Whether and to what extent it carries one out is up to the provider, and it describes this in its documents. The absence of a check step does not mean that the contract contains no costs or obligations.
If you suspect a negative entry, it is worth looking at your own data before you sign contracts. The process is described in Bonitätsauskunft beantragen: Schritt für Schritt und deine Rechte (in German).
What to check before you sign
- The total monthly costs, including base fee, usage prices and extra costs.
- The negative-balance clause: may the balance go negative, and how is settlement regulated?
- Notices on additional payments for roaming, premium services and value-added services.
- The term, the notice period and the rule for any remaining balance at the end of the contract.
- Billing: how quickly usage appears, and when a balance is used up.
Take time to read the documents. A contract you do not fully understand is a risk, regardless of whether a credit check took place.
What does this mean for your decision?
A contract without a credit check is not automatically cheap. The base fee, the usage prices and what happens once the balance is used up are decisive. The Verbraucherzentrale NRW conducted the proceedings to protect prepaid customers. How the judgment affects your case depends solely on your contract.
A comparison is worthwhile in any case. Put the total costs for twelve months side by side and calculate with your actual usage. This shows whether a low base price is eaten up again by extra costs.
Anyone who uses a phone a lot abroad or relies on premium services should look at the extra costs especially closely, because this is where additional payments can arise. If you use your phone only occasionally, the way a negative balance is settled matters most.
Frequently asked questions
May the provider let my balance go negative?
Only if the contract terms provide for it. The BGH judgment confirms that a corresponding clause can be permissible under certain circumstances. Check the clause before you sign and ask how settlement works.
What if I have a negative entry?
Whether a provider offers a contract is its own decision. A credit report helps you know the state of your data before you apply. Do not state anything to the provider that you cannot substantiate, and read its terms carefully.
Are prepaid tariffs always cheaper?
That cannot be said across the board. Compare base fee, usage price and possible extra costs, for example for roaming or premium services. Only the comparison with your actual usage shows which tariff suits you.
How do I recognise an unclear clause?
Check whether additional payments, negative balances or extra costs are described expressly. If a clear notice is missing, ask the provider. The BGH requires a clear notice in the contract for additional payments.
What you can do now
- Set the monthly budget you plan for phone and internet.
- Compare at least three tariffs using the total costs and the clauses on negative balances and additional payments.
- Ask the provider in writing whether and how it checks creditworthiness.
- Sign only after you have read all the documents in full.
Related articles
- Requesting your credit report: step by step and your rights (in German)
- Can I calculate my creditworthiness myself? What the new score allows (in German)
- Student discounts: how to save properly (in German)
- Money, account and credit: the overview for young adults (in German)
Sources: Verbraucherzentrale NRW, case law database: prepaid mobile contracts and additional payments (BGH, judgment of 9 October 2014, III ZR 33/14, German) (judgment 2014, accessed status November 2026).
Last updated: November 2026. This guide is general information, not individual advice.
