Are you looking to acquire a contract mobile phone but your bad credit history is making things difficult? Read through this article to find out how you can get yourself a contract phone regardless of your financial history.
These days, bad credit history can limit your access to various products and services. Banks, lenders, retailers, and various service providers will often look at your financial history before deciding whether or not they will offer you their products and services. Perhaps you have previously been turned down by network providers or phone retailers because of your poor credit score. The good news is that many retailers have sourced a wide range of bad credit contract phone deals. So it turns out that even with bad credit, you can get a contract deal on that latest smartphone.
How to Get a Contract Mobile Phone with Bad Credit
Before diving into the nitty-gritty of how you can get a phone contract with your bad credit history, it is important to first understand why a network provider could decline your application. Three major factors result in your loan, overdraft, or phone contract being rejected;
- A poor credit history
Various factors like missed payments (for instance, if you had a loan), CCJ’s (County Court Judgements issued when you have failed to pay up the money owe), and IVA’s (Individual Voluntary Arrangements) account for up to 30 percent of your credit score. And these issues can stay on your financial history records for years.
- Not having a bank account or credit card
Often, most network providers or retailers won’t accept your application for a mobile phone contract if you do not have a bank account, credit card or debit card.
- Lack of continuity
Lack of continuity means various things. For instance, if your current address is new and you haven’t been there for long, or if you have been changing jobs, or have been in and out employment, a provider may think you don’t have a stable income source. This will count against you.
However, there are various ways you can start improving your credit score. So if a provider has refused to sign you up on a mobile phone contract, here is what to do;
- Do not keep reapplying with different providers
Every time your credit history is searched by, say, a retailer, a lending institution, or network provider, a footprint is left on your records for at least a year. So, reapplying several times will leave too many footprints within a very short period. This will raise a red flag with other network providers, and they will reject your application.
- Open a proper bank account
As mentioned in the previous section, you will hardly get that phone contract if you don’t have a bank account with a debit or credit card. So open one to increase your odds of having your contract application approved.
- Improve your credit score
Improving your credit score mainly involves keeping up-to-date with your financial commitments. Remember that missing even one credit card payment can adversely affect your credit score. So begin making regular payments, and start clearing all old financial ties.
- Ensure that your name is on the electoral roll
Many people get rejected because a provider couldn’t match their names to the addresses they gave. So ensure that you register and then apply for your mobile phone contract using the same address.
Contract Phone No Credit Check. Is this even possible?
While most providers often a client’s credit history before considering their application, some offer pay monthly mobile phone contracts without running credit checks. However, this often applies to cheaper phones. Higher-tier handsets like Galaxy S9 and iPhone XR will often be credit-checked. So chances of getting such phones on contract with bad or no credit are minimal.
So if you are looking for contract phone no credit check deals, then you will be forced to go with a cheaper handset. Giving cheaper handsets reduces the risks outlay for the retailer or network provider. However, the good news is that many providers are these days offering early upgrade options. What this means is that once you have proved that you can pay regularly and on time every month, your provider gives you an option of getting the latest smartphones. You can, therefore, start with the cheaper phone, pay regularly, and take the chance for an upgrade when it is offered.
Getting a Phone Contract with Bad Credit
Perhaps you really want a phone on contract, but you have been declined by a provider. Here is what to do;
1. Compare Handsets
Maybe you chose an expensive mobile phone with too many features, and with your sketchy credit history, the retailer or network provider decided to reject. Therefore, you need to compare the available handsets.
As noted earlier, it is quite difficult to get a high-end phone with bad credit. So you may have to make one or two sacrifices on the features and choose a cheaper handset. By doing this, you will significantly reduce the risk to the retailer, and odds are your contract will be approved. Often, people with bad credit have a lot of success choosing more basic phone models than top-of-the-line Apple iPhone or Samsung Galaxy models.
2. You might want to consider SIM Only plans
To get a contract with bad credit, you will need to weigh all your options, and one of them is taking a SIM Only plan. While this will not immediately give you a phone, it is a good way to start rebuilding your credit rating. The approval rates for SIM Only contracts are very high, with industry reports suggesting about 99%.
After being turned down, some customers give up or keep reapplying with different retailers or phone companies. However, the reality is that unless you start rebuilding your credit history and prove that you can make consistent payments, you are never going to be signed up on a contract for any latest smartphone. Using your older handset for just 12 weeks won’t be the end of the world. So consider getting a SIM Only plan with which you will build a platform with your provider for the future.
So long as you make regular payments as required of you, in most cases, the phone company or retailer will offer you an option to upgrade after three months. The is one of the best options if you have previously been declined because of bad credit, and in all honesty, it is more sensible than having multiple rejected applications. In case you have no credit, some providers have SIM only no credit check deals.
3. Consider paying an upfront security deposit
Some phone companies and retailers allow customers to pay a reasonable upfront security deposit to get a mobile phone on contract. They also offer this option for a variety of contract phone no credit check deals. Depending on the phone you want and your credit history, the security deposit may range from $50 to $400. These deposits are also generally applied per line, which means that a customer that wants multiple handsets on their account will often pay multiple deposits.
The deposit lowers the retailer’s risk, and if they collect substantial amounts of money in upfront deposits, they protect themselves. Chances are, therefore, that the provider will approve you phone contract application. Over time, if you prove that you can make payments regularly and on time, you will get the security deposit back. If, however, your account isn’t in good standing with, for instance, you missing payments, the provider will continue holding the security deposit.
This is also one of the effective methods of getting a phone contract with bad credit. Many customers have successfully used it. It’s perhaps your best bet.
4. Joining a family plan can also work
Joining a family plan is another great option. Join someone else’s plan, say, a relative’s or your parent’s family plan. Many phone retailers offer a variety of family phone plans. You will completely bypass a credit check, and since family plans often come with discounted rates, you will end up saving some good amount of money. With some carriers, a single line in an unlimited contract can cost anywhere from $60 to $85 while an unlimited family phone plan split 4 ways costs about $40 per person, before auto-pay discounts, taxes, and fees.
Some retailers will let the account holder have as many as ten lines per plan. However, the account holder has to have a stellar credit history to obtain the services. And if you don’t pay your bills, the account holder is the one that will be ultimately responsible. You, therefore, need to make sure you don’t miss any payments.
5. Find a co-signer
Today, some carriers allow customers to use a co-signer to get a mobile phone contract. A co-signer is a person that signs onto the contract with so that if you won't pay up, the co-signer becomes ultimately responsible. It falls under them to make the payments. But, again, the co-signer should have a good credit history since when the company will process your application; it is the co-signer's credit that will be checked, not yours. The account will be on your co-signer’s name, which further stresses the fact that they will be on the hook in case you do not pay your bill.
However, the cosigner can move the account to your name. When this happens, carriers often run your credit. Since the account is already open, some carriers do not require any deposits when moving an account, so even if you have bad credit, you don’t have to worry. The co-signer can be anyone, say, your friend or relative. A co-signer puts their credit record at risk by agreeing to sign onto the phone contract with you. It is important, therefore, to ensure that they understand the risks and see to it that you pay your bills.
6. Try becoming an authorised user
You can get yourself a phone on contract by becoming an authorised user on another person’s account. How does this work? Some providers allow customers to put their accounts under other user’s names. This way, the phone company will allow you to use another user’s credit score to get a contract. The account owner can then allow you to change the account if possible.
If you decide to use this method, it is advisable that you get the contract under someone you can trust, for instance, a relative or a best friend. Again, if you miss any payments, it will fall under the account owner to pay the bills. So, ensure that you do not miss any payments. This option is very similar to using a co-signer. Note that since the account is in someone else’ name, making regular payments will not be improving your credit. Therefore, don’t forget to continue improving own credit in other ways.
7. Communicate with the network provider
Sometimes, speaking directly with a network provider can help. When applying online, many phone retailers have several policies that they must follow. In many cases, customer service representatives offer more flexibility. Your credit may not be that bad after all, and talking directly to the retailer may help you get that phone you have always wanted on contract.
It is apparent that even with bad credit, there are many ways you can get yourself signed up on a phone contract. So in case you have previously had your application declined, carefully weigh your options and try again. Using one the ways explained in this piece is sure to get you the phone you want on contract. Again, if you do not have a credit history, as discussed, there are various contract phone no credit score deals out there. You only need to find the deal that best suits you and apply.
It is important to bear in mind that bad credit history is not one of those problems that fix themselves. So even if you are finally allowed a phone contract with your poor credit score, it is wise that you start rebuilding your credit record. The tips provided earlier in this article should help start you off.