Getting rejected on your phone contract application is a common problem in the UK. With more and more people dealing with bad credit issues, it’s no surprise why customers are struggling to avail a decent contract. Rejections are rampant especially if you apply from major carriers in the UK. But rather than stop applying, there’s actually one alternative you may want to check out.
Bad credit phone contracts are now more popular than ever. They work just like traditional phone contracts. The customers are offered a choice of handset and a bundle plan on call, text and data services. There’s also a monthly bill you need to pay for, which covers the cost of both the phone and bundle. But there are also some differences. Below are comparisons of the pros and cons to help you decide whether a bad credit phone contract is indeed for you or now:
What are the Pros?
- No credit check – With this type of contracts, there is no credit check required hence perfect for you if have a less than stellar credit rating. Your credit score is not a factor for your approval. Even if you’ve been declined a phone contract by other major carriers, you can still apply and get approved for bad credit contract phones.
- Basic requirements – The requirements are also pretty basic. You just need to be of legal age and a UK resident. You’ll also have to provide proof of income. Carriers need to know that you can afford the monthly bill. If your income supports that, approval is almost always instant.
- Fast processing – Same day processing is possible for bad credit phone contracts because of the no credit check policy. As long as you meet the requirements, you can already receive your phone and use the services within hours after you applied.
What are the Cons?
- Long lock-in period – Like traditional phone contracts, one of the biggest disadvantages of bad credit phone contracts is the lengthy term. You’ll be tied up with a monthly bill for typically 24 months. This means it will be hard to upgrade or switch to a different plan later on. If you breach the contract agreement, you may end up paying hefty fees and worse hurt your credit rating some more.
- Higher cost – Because of the no credit check policy, you can expect the cost of these types of contracts to be higher than usual. You will usually pay more than if you have good credit. Since you have little to no choice, this is a better alternate at least until you can work on boosting your credit score.
- Limited handset choices – With bad credit phone deals, you can’t expect to avail the latest high-end handset from your favorite brand. Most providers that offer these deals usually have a limited handset selection. In most cases, you’ll only have older phone models to choose from.
Is it for you?
Though easy to avail and there is no credit check to worry about, bad credit phone contracts are not always the best choice for everyone. Before you sign and close a deal, it’s best to weigh the pros and cons. Only if the pros outweigh the cons for your particular case should you go ahead and apply for a phone contract. Otherwise, you may want to stick with Pay as you go or a Sim-only deal with no contract for now. As soon as you can improve your credit score, applying for a traditional phone contract should be easier.