Bad Credit Mobile Phone Contracts

By Author: Santiago Bonner
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Bad credit leaves an unwanted mark on your profile, making it hard to apply for any forms of credit, be it a housing loan, a car loan, bank loan, credit cards, etc. If you have bad credit, or no credit at all, it can ruin your chances to borrow money or enter into service contracts, like mobile phone contracts. It’s no wonder then that a lot of people every month are searching for bad credit contract phones.

Although it might cost you more to pay monthly in a determined lock-in contract period, like 24 months for example, there are a number of reasons why you would want a contract mobile phone instead of a pay as you go mobile. First, if you want a certain handset, you can get it free or at a much lower price in a contract compared to pay as you go wherein you buy the phone outright. Second, you can avoid the risk of running out of credits when you are in a contract. Third, if you are a heavy user, you can save a lot more in a contract compared to pay as you go, since pay as you go services typically have higher tariffs and call charges. Lastly, you can be offered a wider choice of handsets in a contract than in ...
... pay as you go, particularly the latest models which are first offered in contracts.

However, in applying for a mobile plan, your credit score will be the first thing the mobile company would want to check. Your credit score is a good indicator of how responsible and capable you are in making payments on time, so if you kept on missing your bills payments in the past, the odds may not be exactly in your favor, and your application might be declined.

Luckily, you can put an end to your misery today, as there are mobile companies who will be willing to accommodate your needs in spite of your credit performance. Although bad credit mobile contracts do not specifically exist, below are some things you can do to improve your chances of getting approved.

Apply Directly to Mobile Network Operators

It doesn’t mean that if you have bad credit, you won’t be approved for a mobile contract at all, rather, your chances would be slim. However, if you apply directly to mobile network operators rather than going through a third party retailer, you’ll have even better chances of getting approved. Even if you fail the initial credit checks, these network operators must be able to offer you an alternative even though they do not specifically advertise contract phones for bad credit.

Apply for Cheaper Handsets

Rather than applying for high-end units like an iPhone, you may want to opt for cheaper gadgets instead. If you are in bad credit and you’re trying to apply for an expensive phone, you are basically doubling the company’s risk, so your chances of approval will be greatly reduced. Cheaper handsets can essentially be considered as bad credit mobile phones as they can make the difference in your application.

Consider Sim Only contracts

Although you can get approved for a contract with phone, sim only contracts have the highest approval rates since it limits the risk of the network. So if you already have a gadget that you like, and you just want to take advantage of the 30 day rolling contract instead of the usual 12 or 18 months, a sim only plan could be your best option. In addition, it could be a great way to start rebuilding your credit.

Companies like T- mobile, Orange, Virgin Mobile, Three, and Vodafone offer sim only contracts specifically for people with bad credit. So if you’ve been rejected elsewhere, you may want to reapply for a sim only contract from these companies. With a sim only contract, not only can you keep your existing number and handset, but you can also avail cheaper call and text rates than a standard contract.

Deposit

In some cases, you may need to provide a deposit in order to avail the plan you want. Ideally, the lower your credit score is, the higher the deposit amount you should prepare in order to reduce the network’s risk. Many people searching for bad credit mobile phone contracts are often required to pay a deposit, so be prepared.

Co-signer

A co-signer may also be of help in order for you to get a mobile phone contract. If you can ask a friend or family member with good credit rating to co- sign the phone’s contract with you, you can have a guarantor that takes full responsibility should you miss payments, and this increases your chance of getting approved.

Alternatives

Specific contract phones for bad credit do not exist, so if all the above methods fail, you may want to wait for a while before reapplying. If you have too many and too frequent applications, it may add more “searches” to your file and further damage your credit score. Make sure your applications are spaced out.

Furthermore, you may want to reassess your credit report every now and then. Check it for errors, like personal information errors and credits which are not yours. You can improve your score significantly by fixing those wrong entries in your file.

Lastly, you need to reduce your existing debt and pay your bills on time. If you have paid on time for the last 12-24 months, you can show that you are responsible and some companies might be able to consider your application.

We hope this article has helped you learn about bad credit mobile phones and the reality of getting a contract. However, if you follow our tips above, it can be relatively easy to be accepted.

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