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Mobile Phone Contracts for Bad Credit

Fiona Leake
Fiona Leake
  | Edited by Tom Church
Updated 8th February 2021

Can you get a mobile phone contract with bad credit? Is SIM-only the only option? In this guide, we discuss how your credit score affects your chances of getting a mobile phone. We also reveal how to get a mobile phone with bad credit history. Don’t panic, there is a way!

What is bad credit? 

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People usually have ‘bad credit’ if they have a history of not paying bills or paying bills late. Bad credit is reflected in your credit score which will be classed as ‘poor’ or ‘very poor’. 

Having bad credit is one of the main reasons why you may be turned down for loans, credit cards and other forms of borrowing money. 

How do I check my credit score?

You can take a look at your credit history by asking any of the three main credit reference agencies, Experian, TransUnion or Equifax. You can request a copy of your credit history for free from these credit reference companies.

The checks aren’t recorded on your credit report and only the credit reference agency will know about it. 

If, once you check your report, you discover that you do have a poor credit score, avoid applying for the main popular mobile phone contracts. Multiple failed applications may further damage your credit score.

Don’t panic though, there are some options for you to get a mobile phone contract still! Read our guide to find out how...

Why do I have bad credit?

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There are many reasons why you might have bad credit:

  • Breaking a credit agreement - when you sign a credit agreement, you’re agreeing to make at least the minimum payments on time every month and to never exceed your credit limit. If you break these rules, a black mark will be put on your credit history and your credit score will be lowered. 
  • Financial troubles - having a County Court Judgement (CCJ), being declared bankrupt or getting an Individual Voluntary Arrangement (IVA) will all damage your credit score.
  • Having no credit history - you could have ‘bad credit’ if you’ve never taken out credit or a loan before. This is because companies will have no idea about your financial history and how you handle paying back money. 
  • Too many credit searches - multiple applications for borrowing money will leave hard searches on your credit file. This can damage your credit score. 

What type of things negatively affect my credit score?

If you’ve been declined for a mobile phone contract, it can be very frustrating. What makes it worse is the vague response from the mobile provider, it’s unlikely you’ll ever find out exactly why you were rejected. 

So, here are some common things that damage your credit score:

  • Bad credit history - as we’ve explained above, your bad credit leads to bad credit history. This can be caused by many different factors.
  • Lack of continuity - if you regularly change address, have an unstable employment history or change jobs quickly, this could work against you. 
  • No credit card or bank account - if you don’t have the ability to pay with a credit or debit card, you won’t be accepted for a mobile phone contract.

Why do mobile networks carry out a credit check?

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Mobile networks carry out a credit check because a phone contract is a form of borrowing. You’re borrowing the phone and paying it back each month until you own it. Much like financing a car, for example. 

The network provider will take a look at your credit history to determine how reliable you are. If you’ve missed payments on bills in the past, it might raise flags and make them less likely to accept your mobile phone application.

Don’t make the mistake of applying for multiple mobile phone contracts right away. These credit checks are classed as a ‘hard search’ which leaves a mark on your credit score. Loads of applications will only further damage your score. 

Pick one mobile phone contract deal and apply. If you’re rejected, aim to improve your score first and consider other deals for bad credit before rushing to apply again.

How can I improve my credit score?

If you’re patient, it’s possible to improve your credit score over time. This will make future applications for mobile phone contracts, loans and more much easier. Here are a few ways you can improve your credit:

  • Sign up to the electoral roll - registering to vote is a great way to boost your credit rating. Providing proof of address to credit reference agencies makes you look reliable. 
  • Limit applications - every time you apply for a mobile phone contract, it’ll be marked on your credit history. Don’t apply for too many at once.
  • Don’t miss payments - if you have a credit card, loan, mortgage or other forms of finance, make sure you make your payments in time.
  • Don’t use more than 50% of your credit limit - if you use too much of your credit limit lenders will think that your finances are unstable. Try to keep your balance low.
  • Check your credit report - your score could be impacted by mistakes on your credit report. Get in touch with the credit reference agency to rectify any mistakes you notice.

Is there such a thing as a no credit check phone contract?

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It’s rare for mobile providers to offer pay monthly phone contracts without a credit check. If they did it would be for cheaper handsets. Smartphones, especially the higher-end devices, will always be subject to credit check.

If you see an offer advertising a no credit check phone contract for the latest iPhone, for example, be careful. It could be a scam so do your research. 

Can I get the new iPhone with no credit check?

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iPhones are high-end smartphones that come with high-end price tags. This means that you’re unlikely to be approved for an iPhone contract if you’ve got a bad credit score. A mobile provider isn’t going to send you an iPhone worth over £800 for free if you have a history of missing payments. 

Sadly, even if you know you’ll repay the iPhone every single month, your credit score is determined by a computer. It’s not worth applying for the best iPhone deals until your score is improved.

We would suggest that you buy an older, more affordable iPhone model such as the iPhone SE. You could buy a secondhand iPhone SE on eBay for around £75! You could then get a great SIM only deal to go with it. 

Once your credit score is improved, you could consider applying for the latest iPhone contracts.

Best mobile phone networks for bad credit 

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There isn’t a ‘best’ mobile network for people with bad credit as all providers mostly operate in the same way. For example, they all use companies like Experian and Equifax to check your credit score. This means that if you’re turned away from one mobile network, the result won’t be any different with another. 

However, you still do have some options. 

What networks don’t carry out a credit check?

If you’re looking for a mobile phone contract, all mobile networks will carry out a credit check before agreeing to send you a handset. The older and cheaper the phone you choose, the more likely you are to be accepted, even with a bad credit score. 

If you’re looking for a SIM only deal, some mobile networks offer SIM only contracts without a credit check.

Is it possible to get a mobile phone contract with bad credit?

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Yes, it’s possible but you might have to compromise on the exact phone you want. Having bad credit doesn’t make it impossible to get a pay monthly phone deal, you’ll just have to pick an older, cheaper phone.

A mobile phone contract gives you a free handset and a monthly allowance of calls, texts and data. You pay back the cost of the phone in monthly installments. The more expensive the phone, the more of a risk you are with a bad credit history. However, mobile networks might consider you for cheaper contracts.

Your best bet is to pick a phone within your price range and contact the mobile provider to discuss your options.

Which networks offer bad credit SIM-only deals?

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Some networks do offer SIM only deals with no credit check. These no credit check SIM only deals act more like pay as you go bundles. You’re given a monthly allowance of calls, texts and data that runs out after 30-days. You then must buy another bundle.

Smarty 

Smarty offers simple straightforward SIM only plans that only last a month and don’t require a credit check. Whilst you won’t be able to get a free handset with Smarty’s plans, you will be able to enjoy data rollover and unlimited minutes and texts. 

If you can afford to buy a handset outright, a Smarty plan can be ideal for people with bad credit. 

Giffgaff

Giffgaff also offers some great deals without a credit check. Giffgaff’s SIM only plans are called ‘goodybags’ which is a bundle of allowances that last 30-days. Once you’ve used your goodybag, you can buy another one. This gives you the freedom to either renew the same one or pick a different goodybag. These pay as you go bundles don’t require a credit check and are great value for money. 

ASDA Mobile

ASDA’s SIM only plans work as pay as you go 30-day bundles. ASDA uses EE’s network to provide its mobile service, meaning you can enjoy super-fast and reliable speeds throughout the UK. ASDA Mobile offers bundles of minutes, texts, and data to use within a month. The prices are affordable too, ranging from £5 to £20.

As you can see, the only time you can get a SIM only deal without a credit check is when it operates as more of a pay as you go bundle. However, these bundles offer fantastic deals and often an unlimited allowance. This means that you can still get a great deal without a credit check!

How to get a mobile phone contract with bad credit

We would suggest that it’s a good idea to improve your credit score before taking out a contract phone. However, if you’re determined to purchase a contract phone, here are a few tips:

1. Find a cheaper phone

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Going for the high-end smartphones from the likes of Samsung and iPhone will only result in a declined application if you have bad credit. You’ll have to sacrifice some features to find a phone that you’ll realistically be accepted for. 

The higher-price of the phone, the more likely you’ll be refused. So, take the time to compare devices and find a more affordable phone for your budget. 

2. Apply with the network provider directly 

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If you’re struggling to find a contract phone plan that will accept you, try ringing up the provider directly. Speaking to a customer service representative will likely yield better results than applying online and being declined by a computer. 

You can discuss your situation and what you’re looking for. You’ll be able to negotiate with customer service and find a solution. 

3. Pay an upfront deposit 

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You’re more likely to be accepted for the phone you want if you offer a significant upfront deposit. This reduces the risk to the mobile network as they’ve received a substantial amount of money upfront.

Offering to pay a portion of the cost of the phone upfront is the best way to get accepted for a contract phone, even if you have bad credit. You should only put down a deposit if you can truly afford to. There’s no use getting yourself into debt for the sake of the new smartphone! 

4. Don’t keep applying 

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The saying ‘if at first you don’t succeed, try and try again’ doesn’t apply to anything involving credit! If you’ve been rejected for a mobile phone contract due to bad credit, don’t apply again. You’ll just be rejected a second time and it’ll damage your credit score further. 

If you can’t get a mobile phone deal due to bad credit, you’ll have to consider other options. 

5. Consider a SIM only plan

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SIM only deals don’t come with a handset, just a monthly allowance of calls, texts and data. The network’s main concern about bad credit would be you paying back the cost of the handset. This is why SIM only plans are much easier to be accepted for. 

You could buy a smartphone outright from an affordable secondhand site such as eBay. You can then pick a SIM only deal to suit your usage. Some SIM only plans don’t carry out a credit check at all.

We would recommend taking out a sensible SIM only deal and gradually rebuilding your credit over time. You’ll then be in a much better position to buy a contract phone in the future.

Been declined for a mobile phone contract? Here are your options...

If you’ve been rejected from a phone contract application OR you’re concerned about applying, you need to weigh up your options. Here’s what you should do:

If you have very poor credit, consider SIM only…

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If your credit score is very low and you’ve been rejected for even the cheaper contract phone plans, then your only option is to buy a phone outright and pick a SIM only plan. 

The approval rates for SIM only deals are much higher and there’s even the option of no credit check SIM plans. 

Whilst the idea of keeping your current phone or buying a cheap handset outright might not be very exciting, it's the best way to rebuild your credit rating and save some money. 

Paying for a SIM only deal monthly will prove that you can consistently make payments on time. Not only will this help your credit score but also will fill your current network provider with confidence. Some providers will give you the option of upgrading to a phone contract after you’ve proved you can pay for a SIM only deal for 12 weeks. 

Sadly, a bad credit score won’t just disappear. Sometimes it’s best to just be patient and slowly work your way back to good credit. 

If you have bad credit and have been declined for the latest iPhone…

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If you have poor credit and are unable to be accepted for the latest flagship smartphones, then you have two different options to consider:

  1. SIM only - you could keep your current smartphone or buy an affordable one outright. Then select the best SIM only deal for you
  2. Cheaper phone - you could find a much cheaper phone and sacrifice a few features and take a contract out on that.

If you have a poor to average credit rating…

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If your credit rating isn’t at the very bottom and it’s leaning towards average, then you have more contract phone options available. You won’t be able to get the latest iPhone but you might be able to pick some affordable smartphones

Should I get a mobile phone contract if I have bad credit?

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If you’ve got a bad credit score, the first thing you should do is focus on rebuilding your credit history. You can do this by regularly paying bills on time and clearing any debts. 

If you’ve already got a phone that’s working fine, we would recommend that you keep using that phone and opt for a SIM only plan. Paying for your allowance of calls, texts and data each month will help to slowly rebuild your credit score. 

SIM only plans are also much more affordable than taking out a phone contract. 

If you want the latest smartphone, then it’s worth building your credit score first and getting a contract phone when your credit score has improved. There’s no point getting a phone contract for the sake of it. If you’ve got a bad credit score, you’ll only be accepted for the cheapest handsets. If you want the more expensive devices, it’s best to just wait! 

If your heart’s set on a phone contract, there are steps you can take to be approved, even with bad credit. However, if you can go without for a few months, build your credit score first.

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