Consumers like to pretend otherwise, but mobile phone contracts are a financial contract. Moreover, just like any financial contract, the companies that offer them use credit scoring to ensure that all potential customers are viable investments.
In the UK, Equifax, Experian and Callcredit are the credit ratings agencies. These companies collect and compile all financial information regarding you. Every financial decision you make goes onto your credit file.
Bad financial decisions like paying rent late, using payday lenders or exceeding your credit limits appears on your credit file as evidence of serious financial mismanagement. Unfortunately, this tells phone companies that you’re a poor investment.
Companies, particularly those that are giving you an expensive technological piece of kit with an antenna—your mobile phone—and expecting you to look after it, need to assess you for your risk. A company can’t afford to give phones out, if there’s no chance they’re going to get the money for it back. Therefore they use credit files to work out the risk of each and every customer.
Hence, if you have a bad credit rating, then you’re a risk and a mobile phone network provider isn’t going to trust you. You might not pay for the phone because you run out of money, if you have a bad credit score. You might not pay for the calls, the data, and the texts you use each month because you’ve defaulted on your debts, if you have a bad credit score. These examples are how mobile phone network companies read into your credit file.
Unfortunately therefore, if you find yourself with a bad credit file, it’s very unlikely that you are going to be able to obtain an excellent, all-inclusive, cheap contract that comes with the iPhone 401, or whatever number we’re on these days. However, there are alternatives open for you to consider:
- A bad or no credit mobile phone contract service
- Guarantor mobile phone contracts
- Prepaid packages
- Sim-only deals
You can’t escape bad credit; you can only improve it over time. However you can adjust to cope with it and get a mobile phone contract in spite of it.