Credit reports: How do they affect mobile phone contracts?

The modern smartphone is a technological marvel. In the space of 8 short years from the release of the Apple iPhone, the first real smartphone, the technology associated with these incredible gadgets have continued to improve in leaps and bounds.

And now, it’s difficult to find anyone that does not want a smartphone or already has one. The problem is, these little gadgets don’t come cheap, do they? For that reason, many can only afford to come near one of these high-end smartphones by taking a mobile contract.

Easy enough isn’t it…

Well maybe not! Contracts take your credit report into account. Any mobile phone company providing a contract option for these smartphones need to know that should a person apply, they can make the monthly repayments and not default at any point. For that reason, if anyone applies for a regular mobile phone contract, the company they apply to will run various checks on the individual, including a credit check. Here they look at a range of information including whether you are a voter on the electoral role, if you have ever made non-payments to other forms of credit accounts or even loans, other types of non-payments and finally if you have ever been bankrupt.

If any of these should not be in your favour, there is a very good chance that you will be rejected for the cell phone contract that you are applying for.

So now you understand how a bad credit record can affect something as simple as owning the latest and greatest smartphone. Luckily, there are a few other routes you can go to securing a contract.

Other alternatives when you are rejected for a regular mobile phone contract

Let’s look at a few alternatives you could consider

  • Guaranteed/bad credit mobile phone contracts

    A guaranteed or bad credit mobile phone contract is specifically aimed at individuals who have suffered rejection when it comes to a regular contract. Here, your credit rating plays absolutely no part in determining whether you are eligible for a contract or not. It is only down to your ability to repay a monthly fee that will determine if are a suitable candidate.

  • Pay as you go

    This is an option, but only if you can secure a mobile phone from somewhere. Perhaps a ‘hand me down’ from a family member. If you do have a phone then a pay as you go deal is the way to go as this does not require any form of credit check.

  • Sim contracts

    This form of contract sees you paying for a sim card only. Payment takes place every month and is made for the selected calls, text message or data package you signed up for. Again, much like a pay as you go option, you will be required to source a handset elsewhere.

  • Older phones

    Finally, you might consider trying to apply for a contract with older model phones. This will not only be cheaper but if your credit rating is bordering on the negative, some suppliers might still supply you with a phone especially as they are less expensive than a regular contract.