Mobile Phones and Your Credit Report

The new iPhone 6S has officially been released! Are you braving the long line outside the Apple Store or planning to wait patiently til the pandemonium subsides? In your quest to obtain the iPhone 6S’ brand new and updated features here’s a question you might want to ask, will you be able to get it with a bad credit score?

What do mobile phones have to do with credit reports?

Unless you’re buying the handset outright which can cost upwards of £400, you may think that as long as you have the money, you can quite easily nab yourself the latest smartphone. But this isn’t true. As you may already know credit reports and your credit score affect your ability to borrow money and a monthly phone contract is essentially a type of credit. Instead of paying up front for the phone and the usage, you pay in monthly instalments, just like a loan.

Mobile phone networks providing contract deals are focused on your ability to keep up with your monthly payments. Whilst they will run a credit check on you when you apply for a phone on contract, they cannot pull all your personal financial information and you must consent to a credit check first. The types of credit information mobile phone companies look at when you apply for a contract phone are:

  • Electoral roll
  • Credit account defaults
  • Non-payments
  • Bankruptcy

If any of these show up on your credit report it will send a red flag and you may be rejected.

Can’t get a mobile phone contract – What can I do

If you get rejected for a phone contract from one phone network due to something on your credit report, there’s a chance you may not be accepted elsewhere at the moment. However it’s not the end of the world, there are a number  of things you can do.

Ideally the best place to start would be to check your Noddle credit report and score so you know where you stand and then make the necessary changes to improve it.

  • Pay as you go – Many mobile phone networks have good pay as you go deals that don’t require credit checks, so it could be a good idea to explore this route until you get your credit report and score up to scratch. This will mean buying the phone outright if you have the money and topping up with credit as and when you use it.
  • Sim only contract – For this you enter in to a contract however, it’s only for the sim and you pay every 30 days for your calls, texts and data allowance. Since the mobile phone company is not providing the phone your monthly network payments will be lower and thus it may be easier to pass a retailer’s checks. Again this option will require you to buy the phone outright.
  • Older model –  If you’re not fussed about getting the latest model try going for an older model which will be cheaper. Older models are typically less expensive than the latest high-end devices which makes things easier on the wallet or may make even be easier to get on a contract

Applying for a mobile phone contract is really no different to taking out a loan or credit card so if you’re thinking of getting one always check your credit report first and follow our tips to decide the best option for you.

Need help improving your credit score but not sure how?

The good thing about your credit history is that it can always be made healthy again and there are steps you can take to improve your credit score. Find out more here.