How to get a mobile phone contract if you have a poor credit rating

Annie Button
November 28, 2018

Mobile phone contracts are a tempting way to get a top-of-the-range phone and a bunch of great extras. But, if you’ve struggled with your finances you may already know that it’s not always easy to sign up for one.

Before signing up to a long-term plan, most carriers do a quick credit check to help them work out whether you’re in a secure position to pay each month. If you’ve got a low credit score, you’re often considered too high of a risk for a network to offer you a deal.

This might not be such a problem if mobile phones weren’t such a huge part of modern life. With everyone glued to their handsets 24/7, being without one can feel like a big disadvantage. Fortunately, if you’re desperate to get a decent phone plan while in the process of restoring your credit rating, there are four ways you might be able to get a deal.

Sign up to a family plan

Most carriers nowadays have specific contract bundles designed for families, where multiples phone lines (sometimes up to 10) are linked up to a single plan. These are managed by one main account holder who will need to undergo a credit check, but the family members using the other lines on the service will not.

The added bonus of this type of plan is that, by splitting the bill, you can often get each line for cheaper than you would be able to individually – a bit like a car insurance policy that covers multiple cars.

The risk with this setup is that the main account holder is responsible for paying the overall bill. You’ll need to make sure that you pay them in a timely manner to avoid affecting their credit rating and may find your line affected if they run into their own financial difficulties. However, family phone plans can be a very good deal if they work out.

Ask someone to be a co-signer

Some carriers offer the option for you to have a co-signer on your agreement. This person acts like a guarantor and, like on a family plan, they would be on the hook for missed payments. As long as you have someone that has a good credit score and is prepared to help you, this can be a good alternative to a family plan.

Once you’ve started to repair your credit score, the account can eventually be moved fully into your name. This can often be a way to bypass putting a deposit down, providing your credit rating is high enough for the carrier to accept the change (it will depend on the carrier’s policy though, as some companies may still require a deposit).

Pay an up-front deposit

Talking of deposits, some carriers will allow you to put down a sum of money towards a phone contract if your credit score isn’t high enough. Again, each company will have a different policy, so it’s worth shopping around for different options.

Be aware that the deposit can be a few hundreds of pounds – after all, brand-new handsets usually require an up-front payment even for people with excellent credit. However, sometimes the network provider will give you your money back if you consistently pay on time for a certain period (or at least let you use your deposit towards your bills).

Try Pay-As-You-Go (PAYG)

PAYG plans used to be all the rage but an increase in internet usage meant that pre-paid credit would quickly get eaten up and users gradually shifted to unlimited contracts for a monthly payment. Nowadays, a lot of people still think of PAYG plans as outdated and insufficient, but that’s simply not the case.

If you’re working your way out of debt, a pre-paid phone can be a big weight off your shoulders while you find your feet. There’s no credit check and no obligation to pay a high fee every month. Minimum payments vary between carriers, but you typically only need to make £5-£10 top-ups every so often to keep the line active.

Plus, PAYG customers usually get similar network benefits to contract customers and can apply for “bolt-ons” to make their usage more efficient. For example, some companies offer free minutes to phone numbers on the same service or cheap data to use abroad.

Repairing your credit score and getting back on your feet financially can be tough. It might feel like there are modern conveniences that you just can’t afford, but having a phone doesn’t have to be one of them. If you’ve got friends or family members that can help you to secure a contract that’s great, if not then a pre-paid option can help you stay connected while you find your feet.

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