There are people who are inherently inclined to think that approval for a cell phone contract with bad credit is a long shot. This might be informed by the instances in which they have faced rejections in the past or simply their attitude towards UK providers based on what they have heard or read. While this was largely the gospel truth in the years gone by, the atmosphere surrounding bad credit mobile contracts has changed considerably.
With the mushrooming and emergence of mobile phone providers across the United Kingdom that offer bad credit mobile phones, the situation has improved and changed for the better. Nowadays, it’s not unusual or uncommon to see people with a poor credit rating snatch for themselves a contract irrespective of how bad their credit score might be. So what are some of the key attributes of bad credit mobile contracts?
Unless you live under the rock or you’ve recently came back from Siberia, no credit checks have been the biggest selling points of bad credit mobile phones. The allure and subsequent popularity of these contracts has been on the basis that no credit checks are done. Well, maybe I exaggerated on that. Actually, credit checks are done as required by the law but they are not used in any way to determine the rejection or approval of contracts. To make the message simple, bad credit mobile contracts state that they do not perform credit checks which of course have been the biggest selling point to those with a history of CCJs or defaults. When applying for this kind of contract, you need not worry on what your credit score is.
Unlike other standard mobile contracts, majority or all of bad credit mobile contracts require that a person makes an upfront deposit before they can be approved. Well, the logic is quite simple. A business needs to cushion itself and considering the fact that they are doing business with individuals who are deemed high risk; an upfront deposit is in order. Simply put, the upfront payment is simply a mitigating factor to reduce risks on the part of the provider. It is usually a small sum of money refundable at the end of the contract provided that one’s account is in good standing.
This is where the bone of contention is. While providers promise to hook you up with a contract irrespective of your credit score status, they are always economical or selfish when it comes to according you perks. Generally, you get fewer data bundles, fewer text messages as well as fewer calls in a month as compared to standard contracts for people with a healthy history. This is the case with all bad credit contracts and therefore you need to condition your mind properly to enjoy fewer benefits prior to applying.
As stated earlier, having bad credit means you are a risk to the provider. Other than making an upfront deposit, the other way providers cushion themselves is by applying high interest rates. You therefore end up paying highly for these contracts than you would a standard contract. You also have to be locked in for a prolonged period of time as compared to a contract designed for a person with a healthy history.