Can I get a mobile phone contract with poor credit?

Mobile phones are instrumental to most people’s lives: from texting mum, to sorting business appointments to answering emails on the go. While some households still have a landline, the use of wires in telephones is on the decline all thanks to the ease and accessibility of mobiles.

There are many ways to buy a mobile phone these days, but a common way used by many is a mobile phone contract. A contract usually means paying a small deposit, and then making regular monthly payments for 1 or 2 years. The payments cover the cost of the phone and the sim card fees (including data, text messages and calls in most cases). It will often cost a little more than buying the phone outright and then paying for a monthly sim card only. However the difference is often so small that it’s much more affordable for many to use a phone contract to split the cost over a few years.

Yet, despite the benefits of having a mobile phone contract, some people can’t get one because their credit history is poor. While most people use mobiles all the time, a phone contract is still a loan product and its consumers need to be assessed for their affordability and creditworthiness – the same way a bank runs checks before issuing a credit card.

If you have a poor credit history – regardless of your current financial status – you might be struggling to find a provider who will accept you for a mobile phone contract. So, what are your other options for buying a phone?

Sim Cards

If you have plenty of cash or you’ve worked out how to save up, then buying a phone outright and paying for the data usage monthly might be a good way to go. You won’t need to borrow any money to buy the phone, and most sim only deals are a month by month payment service so you won’t be committed into a contract and therefore won’t need to pass any affordability assessments. However, you should be careful which deal you choose. Some sims will be limited to the amount of data and calls you can use, and you will pay a set fee so once your agreed data runs out, that’s it. It might be inconvenient if you frequently use up all your data, but you will be able to budget accurately each month.

Using a pay-as-you-go style sim could mean you end up with a hefty bill at the end of the month which throws your budget and risks financially difficulty. Getting a sim card with a money cap should make managing your mobile costs more affordable.

Second-Hand Mobiles

If you can’t afford to buy a new phone outright, there are often deals to be had on refurbished and second-hand phones. Most registered retailers have to ensure the used phones they sell meet a certain set of criteria so you shouldn’t get lumbered with a phone that doesn’t work. In any case, it’s a good idea to read the reviews of the company as other customers will give a good insight into what the used-phones are actually like (although bear in mind that some people only review products if they’ve performed negatively).

Additionally, if you buy an older model the phone is likely to be much cheaper as well. You might still need to save up a bit of cash, but it won’t cost you an arm and a leg like some brand new phones will.

Asking a Favour

If you’re desperate for a phone – maybe you use it to run your business and can’t take on any new jobs without it – then you could always ask friends or family if they’ve got a spare one lying around that you could borrow for a few days or weeks. It might be an old phone or maybe the screen is slightly cracked, but many people have an old phone in a drawer somewhere that’s simply gathering dust. It might just be enough to keep you moving while you find a new phone or save up the cash to buy it.

Your Credit File

Being unable to secure a mobile phone contract might be disappointing but it’s not the end of the world. There are several ways to buy a phone without a contract. If you do get declined a contract because of your credit history, it might be a good hint to think about how you can improve your credit score for future mobile phone contracts (as well as things like credit cards, loans, mortgages etc). There are a lot of simple things you can do to quickly improve your credit file, and there’s a few things which might take a bit longer, but every little action and step towards responsible borrowing will help.