At JP Phones, we have our fingers on the pulse of everything to do with the world of mobile phones, smartphones, service providers, and contracts. It is our reason for running this website, to help to inform the public of the United Kingdom when it comes to any of the above-mentioned subjects.
Lately, we have been receiving more and more requests about bad credit mobile phone contracts. Now to be brutally honest, this is not something that we were particularly clued up on. Yes, we had heard about them but we didn’t really know how they operate. Well until now that is!
We have spent the last couple of months looking into this form of mobile contract, delving into how it works, what it offers and more importantly if it is worth it. What we found is that these contracts are the only option for people suffering from bad credit ratings.
Bad credit ratings certainly have become a fact of life in the United Kingdom over the last couple of years. Financially, times are extremely tough and people default on credit payments often. This means these defaults reflect on their credit reports, slowing sinking them into a negative credit rating.
When this happens, they cannot hope to get any form of credit product, mobile phone contracts included. And this is where bad credit mobile phone contracts have sprung up from.
But how exactly does a bad credit mobile phone contract work?
A bad credit mobile phone contract is specifically aimed at people who have a negative rating on their credit reports, have ccj’s against their name, who have been blacklisted and even people who may have been declared bankrupt at some point. That said, ordinary members of the public are certainly not stopped from obtaining bad credit mobile phones, but more on this a little later.
Applying is simple. Find the provider you would like to apply for a contract with, fill in the application online or visit their offices, provide them with certain documents and within 24 hours, you could have your new bad credit mobile phone contract and your shiny new handset of your dreams.
In terms of the documents you need to supply to the provider, these are your identity document, proof of address (they will accept a utility bill, a rental lease or mortgage statement), pay slips for the past three months (thus proving you are employed) as well as bank statements for three months for the account to which your salary is paid. This helps the provider determine the best contract for you based on your income and expenditure.
Once they determine a price range that they can offer contracts to you in, you will be shown a number of contract options as well as the handsets that come with them. Of course, they will take note of your preferred handset (everyone has one right) and try to get an affordable contract option with that attached to it. Bear in mind however, you need to be able to make the financial payments each month, so this ultimately will have a bearing at the end of the day. You might want the latest Apple iPhone 7 but if you cannot afford it, best to choose something that you can.
A bad credit mobile phone contract is usually taken out over twenty-four months. That said, should you choose a very cheap handset, you may well get a contract over a 12 month period. This is a great way to go about building up your credit rating. Take a few of these out over the period of 3 years, never miss a payment and your credit rating is sure to improve significantly, providing you don’t miss payments on other credit products. Alternatively, you may opt for a thirty-six-month contract option. This means you will pay the phone off for longer but it will bring down the monthly prices significantly. This could also be a way to try and get the slightly more expensive handset you have always wanted but not all providers will allow this. Note also that bad credit mobile phone contracts are generally a little more expensive than regular phone contracts.
What handsets are actually available?
In terms of handsets, most people would think that contracts such as these would have terrible handsets attached to them, for example, older phones from years ago. Nothing is further from the truth. In fact, if you can afford it, you could get an Apple iPhone 7 or Samsung Galaxy S7. That said, at JP Phones we would recommend that you rather choose a phone that will do the job for you, while not costing too much. Often people just want the latest Apple or iPhone product just because of the prestige attached to it. That should never be a reason when deciding on a phone.
Many bad credit mobile phone contracts offer slightly older, refurbished smartphones, for example, the Apple iPhone 6 or the Samsung Galaxy S6. These are a great option if you simply must have an Apple or a Samsung product. We suggest however, that you rather go for one of the budget smartphones on offer. These phones continue to impress us each year and frankly, can do everything a top of the range smartphone can. Don’t let the term budget put you off either. There is practically nothing these phones cannot do!
Other than people struggling financially, who else can apply for these phone contracts?
Certainly, these contracts came into being as there was a need for them. People with bad credit ratings needed a way to secure a mobile phone contract on credit and because major service providers kept turning them down, bad credit mobile phones were born. That said, anyone can apply for them.
They are not only a great way for people to turn their credit score from a negative to a positive but can be used to build a credit history as well. This will appeal to people leaving university and entering the job market. Often, when they look for a credit product they are turned down as they have no credit history to speak of. Taking out a bad credit mobile phone and completing the contract over twenty months is the perfect way to start building a positive credit history. Once started, it is far easier to then get a mainstream credit product.
No credit mobile phones are here to stay, that is for sure. They provide an excellent outlet for people with bad credit ratings to own a mobile phone on contract even though they may be a little more expensive than a regular contract.