Getting accepted for a mobile phone contract can be a tricky business. We are seeing more and more people having their contract applications denied due to one of many reasons. But this needn’t be the case.
Whether you have bad credit or a lack of financial history there are ways to enhance your chances of getting a phone contract which we will help to explain.
We work with all of the main mobile phone shops and phone networks in the UK and over the past year we have sent thousands of client applications (many on a bad credit basis) to phone suppliers online so we are vastly experienced in helping people to get the contract they want.
Can I get a phone contract with bad credit?
In a simple word, yes. There are hundreds of thousands of people that technically have a bad credit rating, but the reason for this can be as innocent as being too young to have acquired a credit history so it is important to evaluate why a phone shop might refuse to accept your phone application before you go ahead and decide to apply.
Most mobile phone contracts involve applying for a particular tariff that suits you best along with choosing a free mobile phone that will be offered as part of the deal. In some circumstances you will have the option of applying for a free gift as well as a free phone and also potentially get cashback sent back to you just for taking out the contract! When taking all that into account it is easy to see why retailers can be picky about who they accept onto a contract because if they view you as a risky proposition with little credit history, or bad credit history, then they would not want to risk sending out free expensive smartphones and contract phones with free gifts such as LCD TVs, or games consoles if they weren’t 100% certain that you would be able to pay your monthly bills in full.
So before making a judgement on whether to accept a phone application, the mobile phone retailer will credit check the applicant. This is their way to check whether the customer is likely to pay their bills and/or pay their bills one time. The logic is that someone with a good or high credit score, will be more likely to pay their bills, whilst someone with a poor or bad credit rating will be a risk so they are more likely to accept a contract application from someone with a higher credit score. See our section on how to fix a bad credit rating for more details.
How to get a bad credit contract phone
When you apply for a monthly contract online there are a limited number of things that can happen as part of your application. The first is that you could apply and have the application accepted. The second is that you could have an application accepted, but on the condition that you make a contribution towards the cost of the phone. The third option is that your application will be declined outright.
In order to increase your chances of having your application accepted you should consider the following to help your chances.
Follow the steps as described in our “Fixing your bad credit status” section.
– Do not reapply against straightaway after you have been refused. You will have been declined for a reason so it would not be wise to re-apply again without attempting to fix the reason that you were declined in the first place. Plus it can affect your credit score if you have multiple failed attempts to get credit rejected in close succession. Either spread out your applications or
– Apply for a SIM only contract if your phone contract application has been declined. The credit checks for SIM only deals are typically easier to pass for people with bad credit (and by paying the SIM only bills on time over a period of time you are building up a positive credit history which may help to increase your chances of applying for a phone at a later date), alternatively
– Apply for a phone contract that includes a cheaper mobile phone. It is common sense that it is harder to have an application accepted for someone with bad credit if they are applying for a top of the range phone. A retailer may not want to take the risk on sending out any mobiles worth £700 to a client with bad credit, but they may look more favourably on accepting a contract application for a phone that is less expensive. There are many excellent smartphones on the market that were once very expensive models but newer versions have superseded them and the prices drop dramatically. So consider applying for a cheaper contract phone.
– Make a larger upfront deposit on the phone. Instead of trying to get a completely free phone as part of the contract, consider making a contribution towards the cost of the phone. By doing so it reduces the risk of taking on a customer that may have bad credit to the retailer. The higher the upfront payment towards the phone, the less risk it is to the retailer to offer you a contract deal. This can be quite an effective way to get a contract accepted if you have poor credit.
We may not be able to say that you will get a 100% guaranteed contract phone by following the above steps but it will certainly improve your chances.
Fixing your bad credit status
They key to getting accepted for a phone contract with bad credit is the health of the credit score of the person applying. Simplistically, the higher the credit rating, the better your chances of getting a phone contract. There are some no credit check phone contracts on the market but they tend to be more expensive than standard contracts (this is to make up for the risk attached) so although they are a good way to get a phone on contract initially, they can turn out to be more expensive in the long run. So the best thing to do is to evaluate your credit score and take steps to fix it if you have a poor credit rating.
First of all you will need to check your credit rating. This is easily done by applying through a company such as Experian or Equifax (there are usually free trials so you can apply for your credit report and then cancel your free trial so you won’t have to pay a penny). Once you have your credit report you will be able to see how your credit worthiness if viewed. If it is bad, you should consider some of the following steps to repair it.
1. Apply for your credit report and check that the details held on there are correct. If has been known for errors in your details to negatively affect your credit score so make so everything listed in there is correct.
Another good tip is to make sure that you have a landline telephone number displayed as part of your contact details. This helps to re-inforce that you live at a designated place of residence because if you have just a mobile phone number listed against your record it could mean that you live anywhere. If is important to prove your address (see the next point).
2. Are you registered on the electoral role? This is an often overlooked trick to help improve your credit rating. The electoral role basically tells a company where you are registered as living. Therefore, if you apply for a mobile phone contract and list an address to have your bills and free phone sent to but this does not match with the electoral role (or you aren’t listed at all), it will be a red flag to the phone company. If the retailer isn’t 100% sure where you live then why would they risk sending out an expensive smartphone to a person at an unverifiable address?
It is free and easy to add yourself to the electoral role. You can do it online here http://www.aboutmyvote.co.uk/
3. Do you already have a lot of accumulated debt or credit? If you have a lot of debts that are mounting up such as loans, credit cards and other credit arrangements these will affect your credit score. The current debt and credit will be weighed against the current wages or income. The credit score will be negatively impacted if there are already too many debts. Therefore, to improve your credit you would need to take steps to pay back loans, credit cards or other credit agreements.
On the other hand, it is possible to obtain a bad credit rating because you have little or no credit history or do not have a bank account. For example, if you have never taken any form of credit in the past it is likely that your credit rating will be classed as poor. This can seem unfair as you may well be managing your finances well but you must remember that by applying for a mobile phone contract you are applying for a form of credit. If you have never had credit in the past, then the mobile phone retailer will not have any previous records to gauge whether you would be reliable in paying back debts.
So, in terms of your credit and debt history the best scenario is to have applied for credit in the past but to have shown that you have managed this effectively i.e. all debts have been paid on time, etc.
4. Do you have lots of credit cards? If you have a handful of credit cards this will affect your credit because even if you have not used any of them, the credit report agency will report upon the “available” credit that you could draw upon. For example, if you have a credit card with a £3,000 credit limit then you have access to that full £3,000. If you have several cards then you will have access to a lot of credit, so if you do not use particular credit cards you may wish to cancel them to remove your access to the credit from them.
Is it possible to get a no credit check contract?
There are no credit check contracts that are offered but these tend to only apply to contracts with lower value handsets, or if they are for the latest handsets then the prices are significantly higher than the equivalent standard phone contracts that do include credit checks.
Find out from the network or retailer why they declined your application
If you have followed our advice and you have still received a rejection from the phone retailer then you might want to contact the retailer direct and ask exactly why your application has been rejected.
Many retailers have online chat facilities which are quite useful. The sales representative might be able to give you some ideas on exactly what you would need to do to pass their credit check (the credit checks vary slightly between different providers) or better still they might have a contract deal that they could offer you there and then – it might not be the contract you originally applied for but it could be the next best thing.