Cant Get a Mobile Phone Contract Because of Bad Credit?
Cant Get a Mobile Phone Contract Because of Bad Credit? – for individuals with poor credit histories, getting a contract phone may not be simple. Luckily certain UK networks offer monthly rolling SIM-only contracts without credit checks required, making the purchase simpler than ever.
Before applying for a phone contract, it is wise to try and improve your credit score by registering on the electoral roll, using your same address when applying and making timely repayments of other credit agreements.
No mobile phone contract provider is better than any other
Mobile phone contracts may appear simpler to secure than mortgages, loans and credit cards, however, all providers must perform an affordability test in order to assess if you can afford your monthly payments.
Missed payments, non-enrolment in electoral rolls and accruing CCJs, IVAs or bankruptcy can erode your credit rating significantly and make securing contracts harder than before.
Even with poor credit, it is possible to find a contract provider willing to consider your application. Some networks may ask for a deposit or higher upfront payment in order to reduce risk and approve you for a contract. Other providers offer SIM-only contracts designed specifically for people with bad credit and these can help build your credit score provided payments are made on time. Multiple applications within short intervals could adversely impact it further.
You can still get a new mobile phone
Mobile phone contracts are an extension of credit and, much like loans or credit cards, can either improve or damage your Credit Report depending on how you manage repayments. Your provider hands you a device worth hundreds of pounds with the expectation that you pay it back over the duration of your contract agreement.
If you have been struggling with debt in the past, including county court judgments (CCJs), it can be challenging to secure a new smartphone contract. There may still be options, however; such as opting for a more affordable handset.
Pay-as-you-go plans may also help, or searching for network providers who specialise in offering phones to those with poor credit can also be effective options, but be wary as repeatedly failing to make payments can have adverse effects on your Credit Report and limit how you apply for other forms of credit in future.
You can still get a new mobile phone contract
Mobile phone contracts may still be possible even with poor credit, though it may be more challenging than before. Most UK networks run credit checks to determine whether you can afford handset payments; they look at your report to identify any information which might raise red flags such as late or missed payments, unregistered voters on electoral roll lists, CCJs/IVAs or bankruptcy that might indicate potential risk.
Many networks offer SIM only monthly contracts on a pay-as-you-go basis that provide more flexibility and don’t require you to pass a credit check, with Giffgaff, VOXI and SMARTY being among the more popular choices for such offers.
Avoid applying for too many contracts at once as each application will appear on your credit file and have an effect on your score. In addition, using an affordable handset will help build up your credit rating and improve the odds of passing future credit checks.
You can still get a new mobile phone contract with bad credit
Mobile phone contracts are considered forms of credit, so providers will typically run a credit check to make sure you can afford your monthly bill payments. But this doesn’t mean people with less-than-stellar credit histories cannot secure contracts; indeed they still may get approved.
Just be prepared to pay more upfront, usually through a deposit, to cover the cost of the handset and minimise risk to the mobile phone network if payments go unfulfilled. Taking this approach may also impact positively on your credit report.
Consider shopping around, as various networks have different policies that may be more accommodating of you than others. But beware reapplying, as this shows up on your credit file and may appear desperate. Instead, focus on improving your score by paying all other debts in full and being registered on electoral rolls. SIM only deals may also help restore credit.
