Get a foot into the door with a Sim only package
I know, you want the latest handset on a certain network, but first, let me explain that a 30 day sim only package is a great way to show the mobile phone network that you are able to manage your repayments.
By paying your bills on time every month you can show the mobile phone network that you are not a risky customer. This will give you the massive advantage in around three to six months when you call them and ask to upgrade your sim only package to a full 24 month mobile phone contract.
Easiest mobile phone network to get accepted for
If you have bad credit you are probably wondering which mobile phone network is the easiest to get accepted for. In our own personal experience we found Three the easiest mobile phone network, followed by Vodafone and then EE.
Remember, if you are offered a sim only deal at the start, it’s worth considering. You may be asked to pay a security deposit, this deposit usually £100 will be held as security when you are successful in applying for a handset. This security deposit is usually returned after 6 months and can be repaid in form of a credit to your account or as a cheque.
Once you are a customer it’s easier to upgrade to a handset.
Once you take a 30 day sim only package you can build a relationship with the network.
This means that mobile phone network can now look at your repayment history with them rather than just looking at your Credit History.
In some cases you will notice the mobile phone network will not even carry out a further credit check.
This little secret appears to be working well for lot’s of our customers.
Paying by Direct Debit will ensure you don’t forget to make the monthly repayment
You just need to be sure that you set up a direct debit to make your repayments.
Mobile phone networks like Direct Debits as they feel more confident you won’t forget to pay your bill on time.
Ensure you pay your bill on time each month and you should find this little secret is a good way to getting your hands on your new mobile phone contract
But What happens if I can’t get a 30 day rolling sim contract?
Sometimes customers may not pass the Credit Check for a 30 day sim only contract.
This is pretty rare but it can happen
Sometimes this happens because a customer already has a debt with the network, it may be several years ago but some networks will keep a history of customers and the way the handled the contract.
Sometimes you may be rejected if the mobile phone network cannot confirm your identity.
If you are unable to pass a Sim only contract you can try a different network or consider a mobile phone contract with no credit check.
Three and Vodafone are usually the easiest mobile phone networks to get accepted for on a Sim only contract.
In our own experience (with bad credit) We managed to get accepted for full contracts without the need of a sim only contract on O2 and EE.
Every customer is different and the Credit Scoring policies of mobile phone networks change daily, so sometimes EE may be easier to get accepted for where as the next day Three may be the easiest.
Mobile phone networks need customers
Mobile phone networks pay a lot of money to run their networks and the only way they can recoup this money is by making profit. To make profit, all of the mobile phone networks need new customers. This means that all of the mobile phone networks will take their fair share of customers with a less than perfect credit history.
Building a relationship with the mobile network
Once you have proven yourself as a good customer you will find your internal rating with that network will improve. This means you will soon be able to take on additional lines or upgrades.
Usually after six months of being a Contract customer, the mobile phone network will be open to considering a new additional line.
Just be sure the new repayments are affordable, the last thing you want to do is build a good credit rating only to add further damage to it.
Mobile phone contracts can help rebuild or build a credit rating
Remember, your repayment history is going to be reported back to the UK credit reference agencies, so by keeping up with your repayments each month this is going to have a positive impact on your credit rating.
Mobile phone networks credit scoring
When you first apply to the mobile phone network for a new mobile phone contract they are going to use a method traditionally used by most Lenders called Credit Scoring.
When you apply they are going to look at the details you put in your application, they will then carry out several checks, Identity checks, Credit Reference checks and checks at the Uk fraud agencies.
Depending on what you have asked, the credit scoring system will say Yes or No.
High Value mobile phones are harder to get accepted for than lower value handsets
You may not realise this but the higher the value of the handset the harder it will be to get accepted for. This is because the mobile phone network are providing you with a handset which can cost up to £1000!
If you have a bad credit rating then they may not be willing to take such a risk, So by ordering a lower value handset or a sim only contract you will find the acceptance rate easier than trying for a high value handset.
Mobile phone debts
If you do take a mobile phone contract out and don’t keep up with the repayments the mobile phone network will report your missed repayments to the Credit reference agencies, this could damage your credit rating.
If you continue to miss repayments, the mobile phone networks are likely to pass your debt to a debt collection company. So only take on a mobile phone contract out if you are totally sure that you can afford the repayments.
Mobile phone contracts are a great way to build or rebuild your credit rating, but they can also damage one if you don’t keep up with repayments.
Also keep in mind, mobile phone contracts with handsets are now traditionally 24 months long.
Mobile phone contracts with Loans
Some mobile phone networks are now changing the way they operate.
Mobile phone networks like O2, Sky and Tesco mobile will operate by offering the Mobile phone as a loan and the airtime as a credit agreement.
If you have a bad credit rating one of these deals are actually beneficial.
By reporting your mobile phone contract twice (one for the loan) and one for the airtime agreement you can actually benefit well for making two repayments each month.
The disadvantage however occurs should you miss a repayment. Missing a repayment to O2 on both the loan element and credit agreement will mean two missed repayment markers on your credit report over one.
So whilst the loan element is very good for the majority of people, if you do take such a deal it’s very important you don’t miss any repayments.
Upgrading Mobile phone contracts
Once you are accepted and run a mobile phone contract well you will be offered Upgrades and Early Upgrades. Once you get to this stage you will not need to worry about Credit checks as the majority of mobile phone networks will not carry out credit checks on mobile phone upgrades.
O2 and Virgin Mobile are sometimes known to carry out Credit Checks when applying for an upgrade. Vodafone, Three and EE don’t currently credit check customers who upgrade their handset.
Of course in the future this may change, but EE, Three and Vodafone are more happy to rely on their own internal credit rating rather than look into your credit report.
Choosing the right deal on pay monthly is very important
So now you know how you can get your hands on a mobile phone network with bad credit. The most important part now is choosing the right deal that suits you.
Most sim only offerings include unlimited calls and texts, it’s the data part that will differ.
Ensure you understand that going over your included data can be very expensive, so be sure to choose a plan that suits your needs.
Choosing the right deal at the start will ensure you know what your mobile phone package is going to cost.