Bad credit history is a nasty problem. When you have one, expect a ton of rejections when you’re applying for a loan, credit card or even a mobile phone contract. Poor credit rating always gets in the way because it is basically a reflection of your reliability as a borrower.
Most mobile phone contract providers, for instance, refuse approval for people with bad credit because of the high risk. Fortunately, there are simple ways to overcome this problem. When you badly need a mobile phone, below are five ways to get approved despite bad credit history:
Opt for a Low Cost Handset
Now is not the time to dream about owning the latest iPhone or Samsung handset. When you have bad credit, you don’t have as much freedom as those with good credit when it comes to your handset choices. If you want to increase your chances for approval, the best route to take is by opting for the cheaper and lost cost handsets.
Mobile phone contract providers may have a different set of criteria when checking your credit rating but it also usually depends on the type of phone you choose. In most cases than not, applying for a high end handset when you have bad credit only leads to disappointment.
Check out Several Providers
As mentioned previously, different providers have different approval criteria. When one provider rejects your application, don’t lose hope just yet. Remember that there are several providers in the UK. If you check out each one, you are likely to land a good deal that is tailored for your needs and circumstance. They key is to keep on trying and applying until you get approved.
Some providers may reject your application on the basis of your credit rating but they may also offer you a different plan. When they do, you can go ahead and grab it. The plan won’t have the perks of a traditional mobile phone contract plan but it is a good place to start if you want to improve your credit rating. Once your score gets better, you can always upgrade your plan to something that you want.
Offer to Pay an Upfront Fee
At the end of the day, all mobile phone contract providers want is to earn a profit. The reason why they reject people with bad credit is because of the higher likelihood of them losing money.
Considering what providers want, you can increase your chances of approval if you try to lower the risks. One way to do that is by offering to pay an upfront fee. If your dead set on choosing a specific mobile phone, the upfront fee will guarantee that your provider will already have something if they approve your application. Speak with your provider to know about the required upfront fee for the phone that you want.
Bring a Guarantor
Aside from paying the upfront fee, you can further get around your bad credit problem by bringing a guarantor along when you complete your application. The guarantor just like the upfront fee will lower the risks for the provider. But even better, the guarantor guarantees that they have someone to run after in case you default with your monthly dues.
For a guarantor to qualify, he or she should be of legal age, a resident of UK and must have good credit. Your provider may also ask for you and your guarantor to provide proof of income. So long as you can provide the required documents, you can almost always expect for quick approval.
Consider a Sim-Only Contract
When all else fails, there is yet another option that you can consider. You can always go for a Sim-only contract. A Sim-only contract, as the name suggests, offers you a Sim card complete with a bundle on phone services but without the handset. Because there is no handset included in the picture, the monthly fee is going to be significantly more affordable.
Sim only contracts basically are ideal for people with bad credit. It’s low cost and easy to get approved for. But more importantly, the contract gives you an opportunity to improve your credit rating. If you’re consistently on time with your payments, chances are high that you’ll be able to apply for a better mobile phone contract in the future.