Man shows empty pocket

You don’t necessarily have to be made bankrupt, or have received County Court Judgements against you, to find yourself with a bad credit rating. You may have missed loan payments due to sickness or redundancy. You may have just paid the minimum on credit cards, or been late paying utility bills. You may have a debit card but not a credit card, paying cash for everything you require. You may have returned to the UK after living abroad for a number of years. Or you may be the unwitting victim of identity fraud.

Even today, many people are shocked when they get refused for a top of the range iPhone or Samsung contract phone, because of a poor credit rating. Applying for a contract phone deal is no different to applying for a bank loan or credit card, your credit rating will likely be checked. You may have several thousands of pounds in your bank account, but if you’ve missed or been late with a couple of payments over the previous year, it can be enough to reduce your credit score. So, are there any deals out there you can get with a bad credit rating?

Check your credit rating:

The short answer is yes. The longer answer is – longer. If you don’t know already, you need to know how low your credit rating is, and why. You can do this using one of the online credit checking websites. Once you know that, you can begin to use sites like Compare my Mobile to check what contract deals are available to those with a low credit rating, but you need to be honest with yourself.

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If you’ve been unfortunate enough to have been declared bankrupt, or have a raft of County Court Judgements against you, using pay as you go may be the only option while you rebuild your credit score. However, all is not lost. There are a number of companies such as O2, EE, Smarty, and Giffgaff, which offer sim-only contract deals bundled with various apps and allowances, without any credit checks. Usually, over a monthly period, these can be renewed as you go, and are a good way to help improve your status with the company over the following months, before applying for a full phone deal.

Consider a lower spec handset:

It may well be that, while your current credit score isn’t high enough to secure that top-of-the-range phone deal, it is high enough to secure a lower specification contract phone, costing you less per month, and reducing the supplier’s financial risk. On that basis, a supplier may be prepared to accept a credit score lower than that needed for the all-singing, all-dancing iPhone. The camera may not be quite as good, but there are plenty of lower specification handsets available which will do the primary job equally as well.

If you really need to upgrade your phone, how about a second-user handset? Companies like EE have a massive selection of used handsets, including the iPhone and Samsung on monthly payment schemes. Buying a handset and coupling that with a good sim deal can often work out considerably cheaper than some of the bundled contract deals.

Summary of steps to take with a poor credit rating:

  • Check your credit rating online.
  • Adjust your expectations, maybe consider a lower spec deal.
  • Buy a new or second-user handset and pick a sim-only deal.
  • Keep your old handset, go pay as you go, and keep looking for a sim-only deal.
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Obtaining any sort of credit when life has dealt you lemons, is never easy. If the deal you want is not available, don’t give up. Be realistic. Begin rebuilding your credit score with a carefully managed credit card, and a good sim deal to help you get back on track.