Looking for a new contract phone?
It’s a fantastic time to browse the mobile market: there are smartphones catering to buyers of all tastes, on all budgets. You can get a stunning Samsung Galaxy S10 (as covered in this hugely-popular Unbox Therapy video), Apple iPhone 11 Pro, Huawei P30, and so many others in competitive deals that make your money go further.
But there’s one question you may ask before you buy a contract phone online:
How do I know if I’m eligible for a phone contract?
You may think you’re unable to sign up for a good deal for a number of reasons, including bad credit or being a new resident of the UK (or both). But don’t worry — you can still get a fantastic phone no matter how bad your credit score or where you’re from.
And in this guide, we give you all the key information on how to check if you’re eligible for a phone contract in the UK.
Do I have to be from the UK to get a phone contract?
Let’s start with the most basic question.
We live in a more diverse, globalized world now than we did when phone contracts became so important to consumers. Today, you may live in one country for a few years before relocating to another, traveling from one side of the planet to another. The internet makes it easier to work, stay in touch with friends & family, and run our lives remotely no matter where you’re based.
That’s why you don’t have to be from the UK to get a phone contract.
But some providers may prefer you to have lived in Great Britain for three years or more. In this case, you would be asked to submit specific proof of identity or employment from across that period.
This is to confirm you are who you say you are, and to demonstrate that you have regular income. That’s an essential factor phone companies have to consider before providing customers with contracts: if you don’t have money flowing into your account each month, they have no way to know if they’ll be paid.
On the other hand, some providers may be more lenient and award you a contract even if you’ve been a UK resident for less than three years, as long as you have a valid ID and a job.
This ruling appears to be at providers’ discretion, and some may insist on a basic credit check rather than delving into your residential history. This raises another question: what credit score do I need?
What credit score do I need to be eligible for a phone contract?
So, are there mobiles for bad credit available?
Yes, there are. Having a bad credit rating doesn’t mean you’re not eligible for a phone contract in the UK. You can still get your hands on a great smartphone with the features and apps you rely on every day.
But like any other form of credit available to consumers (such as a credit card or loan), a bad credit score can make securing a perfect deal a little bit more difficult.
What information does a credit check reveal?
With a phone contract, the provider is giving you a new handset, texts, calls, and data on the understanding that you’ll pay for it all at the end of each month. It involves a certain amount of trust and commitment, which is why companies perform credit checks and verify your ID in the first place.
If a network provider decides to run a credit check on you, they’ll be able to see how stable your payments have been in the past and whether there are any red flags to suggest you may be a risky customer.
For example, someone who has a history of taking out loans they can’t pay back or maxing their credit cards out quickly could be turned down for a contract. But a buyer with a good credit score is likely to be more sensible with money, both in terms of how they manage it and the decisions they make.
What if you have no credit history?
Unfortunately, you may have no credit history at all if this is the first mobile phone contract you’ve applied for, especially if you have never taken out a loan or credit card.
In some ways, this is both good and bad: while there’s no evidence that you’re untrustworthy with money, there’s none to prove that you can be trusted either.
The first step you should take here is to open an account with a UK bank. This demonstrates that you’re committed to handling your money responsibly and (if you’re a non-UK citizen) to staying within the country for the foreseeable future.
Place a portion of money into the account and avoid becoming overdrawn (which can happen more easily than you might expect).
Next, take out a credit card, if your bank is willing to set one up, though you could apply for one through a company like MasterCard instead. Interest rates may be high for customers without a credit history, but as long as you use it responsibly, there’s nothing to worry about.
Only make small purchases with your credit card and pay the balance off at the end of each month. This helps you avoid paying costly interest.
If you’re concerned that taking out a credit card could be a risk, particularly if you’re prone to impulse buys, consider asking a friend or relative to handle it for you. The important thing is to use it regularly and pay it off in full. Taking out a mobile phone with bad credit will contribute to your credit history too, so make sure you never miss payments.
Over time, if you follow these steps, you can build a credit history that helps you secure loans or credit in the future.
What is considered a good credit score?
Different lenders and credit agencies score consumer credit in various ways, but in general, the higher the score, the better.
Experian, for example, provides credit scores from 0 all the way up to 999, but a ‘good’ rating lies between 881 and 960. A ‘fair’ rating is from 721 and 880. Remember: not all lenders view credit scores in an identical way, and while one sees you as a ‘risky’ customer, others could still take you on.
There are three credit reference agencies operating in the UK at present: Experian, TransUnion, and Equifax. These gather details about any dealings you have had with banks or lenders in the past. This includes information on any bank accounts, mortgages, credit cards, loans, etc. in your name.
But they also look into any bankruptcy records and the electoral roll, too. This creates a comprehensive overview of your financial activities.
So, yes, you can get mobiles for bad credit. There are specialist companies online (such as Mega Mobile Deals) dedicated to helping you find deals on the latest smartphones no matter how low your credit score is.
This is a simpler, less intimidating process than visiting a brick-and-mortar shop and asking what handsets they have available for someone in your position.
How can you improve your credit rating?
While you may not need a ‘good’ credit score to find a fantastic phone contract, having a higher rating still proves helpful in many other areas. For example, you may want to take out a mortgage or a loan someday, and lenders can be very strict when customers ask for large sums of money.
A high score is just one way to demonstrate that you’re worthy of the cash and likely to pay it all back.
Here are a few tips for boosting your credit score:
- Make payments on your accounts on time every month, and in full (where possible), to show you’re responsible with your money — this includes always having funds to cover your phone contract when payment is due
- Take a few minutes to register on the electoral roll, so lenders can verify your identity quickly
- Be careful how much you use your credit cards: a lower credit utilisation rate is further proof that you can handle money sensibly
- Only make credit applications you consider essential, as multiple within a short period suggests you depend on credit to live your life
- Close any unused credit accounts you might have, as lenders could think that you’re unable to handle more credit if you have several deals in place already
You can learn more about credit scores in this quick, simple video from Experian:
What do I need to provide to get a phone contract?
When registering for a new contract, you’re usually asked to provide the following information:
This includes key information such as your name, your date of birth, your marital status, and perhaps your occupation. It’s vital that you be completely honest throughout the application process.
Obviously, providers want to know where you live at the point of application, but they may ask for addresses from the previous two or three years as well. If you move from one location to another often, a provider may wonder if you’re at risk of being out of contact, but it’s unlikely to be a deal-breaker.
Again, be honest in this section: if you’re concerned about the number of moves you’ve made within a short period, providers and lenders can find your history out with a little bit of detective work. And lying makes a worse impression than relocating multiple times.
Bank account details
In some cases, you’ll be asked to submit details on your bank account. This is to confirm your identity further and determine if you’re a ‘safe bet’ in the long run. Questions may be as basic as when you created your account or if it’s in your name only.
Credit/debit card information
Finally, providers could ask for an insight into your credit or debit cards. This is nothing to worry about: again, it’s to check everything is in order.
However, you might be asked to confirm your ID in other ways, such as submitting a copy of your driving licence or a utility bill with your address on it. This may vary from one provider to another, depending on their internal policies and their view of your credit history.
Different Types of Phones with Bad Credit Options
Want to buy a contract phone online with bad credit, but you’re worried that your choice will be limited?
You might imagine nothing but a range of outdated handsets with none of the coolest features or apps. You might even think you’ll be stuck with a model nobody’s used for a long, long time, like this:
But don’t worry. That’s 100 percent not the case.
The choice of contract phones available to customers with bad or no credit is incredibly varied, encompassing the top networks (O2, Vodafone, EE, etc.). You can find releases from major brands like Samsung, Huawei, and Apple.
These include different packages, with variable data, calls, and texts to suit your own phone habits. Perhaps you prefer to send messages to friends and family, but rarely make a call. Or you could see your phone as a gateway to the internet only.
Alternatively, you may be able to get a high-quality SIM card only if you have a phone you’re happy with already.
A poor credit score can hold you back in some aspects of life. If you want to take out a mortgage on your first home to get on the property ladder, a bad credit history could put lenders off. If you want a loan to buy a car, companies will look at your poor rating and question whether they want to give you any of their money.
But that’s simply not the case with phone contracts. You can find deals available online that cater to people with all credit scores and histories. This offers you the flexibility to choose a phone contract that suits your personal financial situation and lifestyle.
So, now you know how to check that you’re eligible for a phone contract, why not start looking?