Contract phones make getting the mobile that you want simple. Rather than having to pay hundreds of pounds up front for a phone, instead, you get to pay in monthly instalments. However, a contract phone isn't a right. In fact, all operators will deny you the chance to get a contract phone under certain circumstances. So if you've been told no, what's the reason? And what are your options? We're here to tell you all you need to know.
How Contract Phones Work
Before we get to the reasons you might have been denied a contract, it's important that you understand how contract phones actually work. You're not getting a free phone, after all. So, you go into your mobile operator and make the deal, and you sign a contract. The mobile operator then runs a credit check on you (which we'll get to in a while), and either let you get that phone or denies you. If you do get the phone, you'll then be paying for it in monthly instalments that are included in your phone bill.
That's pretty simple, and there are really only two reasons that you have been denied the chance to get that contract mobile that you want.
You're Not Allowed to Sign a Contract
The first reason is the simplest, and that's what you're not allowed to sign a contract. In the UK you must be 18 years old and a resident of the UK in order to sign a contract. If you fail under either of these conditions, then you won't be allowed to get a contract phone. The only way around this is to get someone else to sign the contract for you. Usually, this means a parent doing it, which is generally considered acceptable by most mobile companies, though nearly all operators will let someone sign as a “guarantor” of your contract.
Do be aware that should anything go wrong with your contract, if you fail to pay bills, for example, it will be the guarantor that gets into trouble. So if you choose to go this route, do make sure that you live up to all your responsibilities. However, getting a guarantor should mean that you get that mobile contract.
You Failed Your Credit Check
The second potential reason, and by far the most common reason, that you've been denied a contract phone is because you've failed the operator's credit check. As we mentioned above, operators run a credit check on your before giving you a mobile contract. A credit check basically looks at your financial history in order to judge if you're a good risk or not.
If your financial history says that you sometimes forget to pay bills (not just mobile bills, any bills), or that you've declared bankruptcy, or that there are legal proceedings against you for debt, then chances are that your operator isn't going to want to give you a phone unless you pay all the money up front. And that's fair enough since your credit history shows that you're not always great with money and the operator doesn't want to be left out of pocket.
What Can I Do If I Fail a Credit Check?
If you fail a credit check then the first thing that you should do is get a copy of your credit report yourself to find out what's going on (you can get a free copy from any of the UK credit reporting agencies: Experian, Equifax, or Call Credit). Read through your report and make sure that it's all true. If you find things on your report that aren't true, you'll need to go back to the agency website and look up their “dispute resolution” page to try and take the untrue item off your report.
However, if the report is true and you just have bad credit then it's not the end of the world. There are a few things that you can do to improve your credit score. Make sure that you're on the UK Electoral Roll if you're eligible since this improves your score. And then spend a few months being sensible and paying all your bills on time. After around six months or so, check your report, and if your score has improved, you can apply for that mobile contract again.
If you've only just turned 18, or are new to the UK, you might find that you don't have a credit rating at all. If this is the case, you'll fail credit checks automatically until you have a credit history. The easiest way to build a credit history is to get a low-interest credit card from your bank, spend a little on it each month and pay the bill on time. Again, in a few months, you should see that you have a credit score and can once again apply for that contract phone.
What Can I Do in the Meantime?
So, you can't get a contract phone and you're working on improving your credit, or waiting until you turn 18, or until you get your permanent residency. In the meantime, you have a couple of options to get phone service.
The bottom line is that no one is going to give you a phone. That means you'll need to buy one upfront, or use an old handset, until you're eligible to sign that contract. You can pick up cheap mobiles from most high street electronics stores, or even second hand online.
In terms of actual service, PAYG is probably going to be your best bet. Sure, prices are slightly higher on pay as you go services, but not much, and at least you'll be able to make calls, send texts, and get online.
There is another option though: Pay monthly SIM cards. This is basically a phone contract with a monthly limit for calls, texts and data and a monthly bill. However, there's only a SIM card, you won't get a phone. This gives you the convenience of a monthly contract (and you won't run out of credit). Yes, there will probably still be a credit check involved (with most major operators), but the limits for this credit check are lower than for contract phones. As long as you have okay credit, you should qualify for a pay monthly SIM.
Being denied a contract phone can happen, but there are options that will still get you the service that you need. You might need to wait for a while, but with careful spending, you should find that your eligible for that phone at a later date.