When you have a poor credit score, it’s not only your loan applications that will be affected. Even your mobile phone contract application may suffer a rejection because you are now tagged a high-risk customer. Thankfully there are alternatives to typical phone contract deals. Specific for people with bad credit are bad credit mobile contracts, which work like any phone contract. The plan also includes a handset, which is in most cases for free, on top of a bundle plan that covers your allowances for call, text and data services.
While these phone contracts are easily to access and even get approved for, there are just a couple of downsides to keep in mind if you’re applying anytime soon. When you apply for this type of deal, your provider won’t check whether you have a poor credit history due to CCJ or default. Your credit score won’t affect your application’s approval, which means extremely high approval rates for bad credit phone plans. But your poor credit score will affect your handset options. Because you have a poor credit rating, your handset selection may be limited than if you have a good credit score. Read more here.
Another downside to consider is the monthly cost of your phone contract. Again, your credit score becomes an important factor in this instance. You’ll get approved for a phone contract even with your less than perfect credit score but your monthly bill may be more expensive than usual. In the end, you’ll be paying more in total because of your bad credit history.
Despite the downsides, however, bad credit phone deals offer a number of advantages worth considering. Granted that you know that getting a phone contract is the perfect choice for your situation, you have the potential to earn huge savings on your phone bill provided that your bundle plan is well suited for your monthly usage. Another advantage is the free handset. Though the handset choices may not include the latest high-end smartphones, the fact that you get a handset as part of the deal is still an attractive offer for most mobile users. Finally, you also get to use a bad credit phone contract to boost your credit rating. Just pay your monthly bill on time for the duration of the contract and you’re bound to see some improvements on you credit score eventually.
So to answer your dilemma whether you should apply for a bad credit phone contract or not, it’s really up to your situation, your budget and your preference.