A low credit rating affects a lot of financial decisions. It makes huge life milestones such as purchasing a house much more difficult, as getting a good mortgage deal requires proof of good credit history. It can affect smaller purchases, too, like getting a mobile phone contract. The question is, is there a way to get a mobile contract with a low credit score?
Yes, but it’s Trickier
Any phone company wants to ensure that you will pay on time each month, which means they will look at your credit rating to determine your reliability. That doesn’t mean a low credit rating equals no chance of a mobile contract, but it does mean there’s a lower chance your application will be successful. Don’t give up hope, though, as there are some things you can do to increase the chances of getting a mobile phone contract even with bad credit.
How to Increase Your Chances?
1. Get a Sim Card Contract
If you have access to an old handset, you can get on a sim-only contract that will provide you with the data, texts, and minutes you need each month. As sim-only deals are generally much cheaper than deals that provide a new phone, your chances of being approved for a contract may be greater.
Of course, this limits your options of getting a brand-new phone, especially if you don’t have the cash to pay for one upfront, but it does mean you don’t have to go without 4G or unlimited phone calls. Plus, if you know you can pay it back over the space of a few months, you could apply for a bad credit loan to purchase a phone of your choosing.
2. Go for Bad Credit Phone Deals
For those with a low credit score, your options are limited for a phone contract, which often means going for bad credit phone deals, many of which you can find on the web. Unfortunately, these usually don’t include the latest handsets or the best deals, and you might even have to pay a lump sum upfront. If you really want a phone contract, though, they are a good option.
3. Join a Family Plan
If you have a family member with a great credit rating who is willing to add you to their family plan, then it’s an excellent option. It means that the chances of a successful application aren’t reliant on your credit rating but rather on your family members. Plus, you often get even better deals with family phone contracts. Just be sure you’re able to pay on time each month, and you’re good to go!
4. Choose an Older Phone
With a bad credit rating, it’s unlikely you’ll be able to get the latest iPhone or Android without paying for it straight up. Instead, you might have to opt for a budget smartphone. It can be disappointing, especially if you love owning the latest tech, but some sacrifices must be made when you have bad credit. There is no guarantee that applying for an old phone contract will prove successful, but you have a higher chance of approval than if you were to apply for a brand-new phone contract.
5. Use a Guarantor
Renters often use a guarantor when renting a new house or flat when they have a bad credit rating. You can do this with phone contracts, too. While not every contract allows for this, it’s a good idea to look out for one if your credit rating is low, especially if you have someone willing to be your guarantor. Remember – the person who signs must have a stable income and a high credit rating; it can’t be your friend with equally poor credit! After they sign, it is your responsibility to pay on time so that the payments don’t fall to them.
6. Pay an Upfront Deposit
Some mobile phone contracts allow you to pay an upfront deposit in replacement of good credit, which is a suitable option if you have a decent amount of cash available. This shows the contract company that you are serious about paying for your contract, and they’ll be more likely to offer you a better deal and handset in return. For those serious about acquiring the latest iPhone, consider saving enough for an upfront deposit.
7. Search for No Credit Check Contracts
Some contracts don’t require a credit check. As someone with poor credit, these are the kind of phone contracts you want to look out for. It takes a little more research, as you’ll have to scour their website to see what their requirements are, but it’s worth it to ensure you can secure a mobile contract deal without receiving numerous declined applications.
8. Pay-As-You-Go
Most people have early memories of using pay-as-you-go for their first phone. While it doesn’t usually provide as good of a deal as a contract, it is a simple method of ensuring you get all the minutes, data, and texts you need to keep up with communications. It is a reasonable option if you have an old handset or the cash to pay for a new one. One of the benefits of using pay-as-you-go is that you won’t be tied down to a phone contract, which means it’s a sensible solution to use while you build your credit score.
9. Work on Improving Your Credit Score
If you want a mobile phone contract that includes the latest phone alongside a great deal, the only real option you have is to work toward improving your credit score. Luckily, there are plenty of ways to do this, including making frequent payments and never missing a payment. If you haven’t built any credit at all, applying for a credit card and making regular payments can help. Go to Experian if you want to learn more about how to improve your credit score.
You shouldn’t let a bad credit rating ruin all your financial decisions, especially when it comes to getting the minutes, texts, and data you need each month. While getting a phone contract might prove difficult, there’s no reason why you shouldn’t eventually get one.
