Have you been refused a mobile phone contract because you have a bad credit history? Well, don’t worry, here are some essential tips which I guarantee will help you get approved with the UK networks in the next 5 minutes.
1. Remember That Beggers Can’t Be Choosers!
Naturally, credit lenders of items such as credit cards, loans, mortgages and of course mobile phone contracts, are understandably more cautious when it comes to providing finance to those who have bad or no credit history.
Although it is not impossible to get a mobile phone contract If you have a poor credit history, it does make it a little harder to be approved. You may have to make certain sacrifices before being accepted, so be realistic as to what can be achieved and roll up your sleeves as you may need to put some effort into getting accepted for a pay monthly contract.
2. Make Sure You’re Registered On The Electoral Roll
To get credit, whether it’s a mobile phone contract, credit card or loan it is highly important to be registered on the electoral roll. Many people assume they’re automatically registered, or don’t bother doing it. However, not being on the roll will have a big impact on whether you can obtain credit or finance.
Why? Whenever you apply for credit, credit agencies use electoral roll information to confirm your identity, which is then passed onto lenders when you apply for credit, to prevent fraud. So, if you’re not on the electoral roll when making an application..it won’t look too good.
If you’re not registered, or even if you’re just not sure, visit the AboutMyVote website and you can download and complete your local authority’s registration form.
3. Remember To Check Your Credit Report
Each time you apply for a pay monthly contract, your details are passed through a credit check so that network operators can access whether you are able to meet regular repayments. It is therefore very important that your personal credit report is up to date and accurate since this will be the basis on whether you will be accepted or declined.
Studies have shown that many credit reports contain inaccuracies that can harm your credit rating, leading to rejections when you apply for loans, insurance, or a mobile phone contract. These errors are usually the result of human clerical mistakes so it is important that you check all your credit files and monitor them regularly.
There are now many places where you can check your credit report online, but only a handful of places offer them free of charge. Experian offer a 30 day free trial which enables you to check your credit report in minutes.
4. Apply Direct With T Mobile Or Orange
Each mobile network operator has a different credit scoring criteria – with some being more easier to be approved than others.
Although we do not know the exact credit checking requirements for each network, from our research we understand that T Mobile and Orange are more lenient when it comes to providing pay monthly contracts to people with bad credit history compared to the other networks.
Although you are not guaranteed for approval by applying with these networks, by opting for a low cost handset on a cheap line rental, you should ensure you have the best possible chance of being accepted.
5. Choose A Cheap Handset On A Low Monthly Tariff
Did you know when you apply for a mobile phone contract, you are credit scored on the specific mobile phone and tariff plan you have chosen?
The more expensive the handset and the higher the monthly line rental, the harder it is to be approved.
If you are suffering from bad credit history it is therefore advisable to apply for a less expensive “no frills’ handset on the cheapest monthly line rental to ensure the best possible chance of being accepted.
Only those with an excellent credit credit history are likely to be approved for top of the range handsets like the Apple iPhone on a £40 per month tariff, so steer clear from such high value combinations and other packages which include expensive free gifts.
6. Consider SIM Only Contracts
SIM only contracts are much easier to be approved by the networks because no handset is supplied. Although a credit check is still required, the credit scoring criteria is lower than standard contracts that come with a free handset. If you already own a handset you like, then SIM card only contracts are ideal if you are concerned about your credit score.
If you are declined a contract by (after you have applied for a low cost handset on a cheap monthly line rental), it is highly recommended you try again with a SIM only contract.
After making regular repayments of your monthly bill, you will establish trust with the networks who will often allow you to upgrade to a free handset after a regular payment history is seen.
7. Be Prepared To Pay A Deposit
If you are declined for a pay monthly contract, network operators may require an upfront deposit before you are approved for your application.
This is a understandable request by the mobile operators, and if you can afford it, it is recommended that you pay the fee which is then returned 6-12 months into your contract depending on which network you apply with.
The deposits required will vary between mobile operators but are usually worked out by multiplying your monthly line rental cost by 3-6 months. For example, opting for a £15 per month tariff may require a deposit of between £90-180.
Deposits are usually only required when you opt for a pay monthly contract with handset.
8. Get A No Credit Check Mobile Phone
The idea of a ‘no credit check mobile phones’ may sound ideal for those with bad credit, but they only exist in the form of Pay As You Go and SIM-Free variety. All pay monthly contracts require you to undergo a credit checking process to ensure you can afford to repay the contract commitment.
If you are turned down for a pay monthly mobile phone contract, but approved for a SIM only contract, getting a Pay As You Go or SIM-Free handset to go with it is a great combination. SIM only contracts tend to offer much better value than normal pay monthly tariffs as no handset is included, resulting in more minutes and texts for your money.
T Mobile have a good acceptance rate for people with bad credit history with both their pay monthly handsets and SIM only tariffs.
T Mobile now offer their £10 SIM a month SIM only contract as an alternative if you fail to get approved for their contract phones. It comes as a SIM card only without a handset along with a number of temporary restrictions on your account.These include no picture messaging, no international calls and no intertnet access.
Once you have paid 2-3 regular months bills, these restrictions can be lifted and you can ask to be upgraded to a standard contract with free handset upgrade.
Orange have good approval rates on their pay monthly handsets and SIM only contracts. Should you fail the application for a handset, you may be offered a SIM only contract as an alternative.
Orange have a number of interesting features for all their customers such as Magic Numbers which allow you to make free calls to your favourite telephone numbers. Also included is Orange Wednesdays which entitles customers to ‘buy one get one free cinema tickets and Pizza Express takeaway offers.
So there you have it. If you have a bad credit rating it is still possible for you to get a pay monthly contract but it may require a little work and sacrifice to achieve it and there will be less providers that will consider your application. Ultimately, whether you are get accepted or not will depend on your own circumstances, but following the tips above should help you greatly improve your chances.