Crucial information that you need to know about bad credit mobile phone contracts
Over the past number of years, bad credit mobile phone contracts have certainly become more and more popular. And there is a reason for that. They give a group of people who were marginalized because of their bad credit ratings a chance to own a decent smartphone on a contract basis. And in our book, that is certainly a good thing!
That said, there is some crucial information that many people still actually do not know about this product. It is in our interest as a bad credit mobile phone contract provider to help to inform the general public of the United Kingdom about this incredible product, something that continues to make a difference in the lives of people already suffering with bad credit ratings. In this article, we hope to widen your knowledge on the subject of these contracts.
Bad credit mobile phone contracts are for everyone
Without a doubt, these phones are mostly targeted at those individuals who suffer from a bad credit rating, have county court judgments against their names, who have been blacklisted or even declared bankrupt.
This doesn’t mean a regular member of the public cannot apply for them however. In fact, many people do make use of this type of contract. Let's look at an example. Say you are a student just leaving university and you want to apply for a credit product as you start your first job. The chances are very high that you will be rejected for a regular credit card or other similar products. Why? Well, you have not built up any significant credit history as of yet, so the financial institution cannot see if you regularly make payments or other aspects relating to your lending behavior.
In this regard, taking out a bad credit mobile phone contract makes perfect sense. By paying off the monthly instalments, you can help to build a positive credit history that will open other credit products from a host of financial institutions including credit cards, vehicle finance, and even a mortgage.
Expect higher monthly payments
Now because these contracts are made available to individuals who have a bad credit record, logically, the monthly payment will be higher than a regular contract. Let’s be honest here. People have a bad credit rating because they failed to make regular payments on other credit products. The bad credit mobile phone contract provider has to protect themselves in some way if the same thing happens and that is why the monthly instalments will be higher. Rest assured however, they are really not that much higher and you will always be matched to a contract and handset that you can indeed afford.
Bad credit mobile phone contracts should be used to increase your credit rating
A product like this is not only about getting your hands on the mobile phone you have always wanted. For individuals with a bad credit rating, a bad credit mobile phone contract is the best way to start making a positive change in your life. Use the product properly, make the monthly instalment timeously and by the end of the contract period (normally 24 months), your credit rating will be in a far better position than when you first started out. It will take some time, and might even mean you need to take out another contract after the first one but in time, you can repair your tattered credit record. Just remember to make payments on any other credit products you might have as well.
Changing providers is nigh on impossible
Note, it is highly suggested that you stick with your contract once you have signed for your handset. Although you could technically make a change should you so wish, the cancellation fees are often very high. There will also be a minimum time period in which you will be attached to the contract. It is for this reason that it is so important to make sure you have the right service provider and contract in mind when signing on the dotted line!
Another reason why so many people love bad credit mobile phone contracts is because of the speed that they get approved for their chosen contract and handset. Often, if you give us the right documents that we require, we can have you approved within a couple of hours and a handset in your hand by the latest the next day. Why is this? Well, there are no credit checks to run on any person applying for this type of contract. In fact, there is only a little admin work that needs to be processed. For these reasons, approval time is cut down significantly.