What can I do if I’m refused a mobile phone contract?

Most of us take mobile phone ownership for granted, so it can be a bit of a shock if your application for a phone deal is rejected. Here, we take a look at why that might happen and more importantly, what you can do about it.

Why have I been turned down for a mobile phone deal?

As a general rule, providers are likely to refuse you a mobile phone contract either because your application was filled in incorrectly, or because you failed a credit check.

In the first scenario (incorrect paperwork) the situation can be relatively easily resolved. For instance, it could be as simple as you getting one letter or number wrong in your postcode or phone number, in which case they can be amended.

If your application is turned down because of a failed credit check, it could be for one of several reasons, including:

Missed payments or defaulting

A history of missed or late payments can make it harder to secure credit. Defaulting (where you don’t repay what you owe at all) is also a big red flag to lenders.

Poor credit history

Poor credit isn’t quite the same as missing one or two bill repayments. It typically means there’s some sort of official record that sets out difficulties with money. This can include being declared bankrupt, having a county court judgement (CCJ), or having an individual voluntary agreement (IVA) in place.

No credit history

If you’ve recently moved to the UK, just set up a bank account or have never relied on credit in the past, lenders can struggle to work out how reliable you might be when it comes to repayments. It’s ironic but having no credit history means lenders can’t calculate your creditworthiness, making it much harder to secure credit in the first place.

Your identity can’t be confirmed

Lenders also need to confirm that you are who you say you are and that can be tricky if you move frequently and haven’t been at a single address for any length of time. Similarly, if you’re not registered to vote, it can also be difficult to verify your identity.

Why do mobile phone providers check my credit history?

Pay monthly deals that come with a handset and data allowance are essentially a credit agreement. The seller is providing you with the phone and network service on the promise that you’ll pay back what you owe.

Who can see my credit report?

When you apply for credit, lenders will carry out what’s called a hard search on your credit report. This includes applications for personal loans, car finance, and of course mobile phone deals.

Hard searches mean lenders will look at your credit history in detail and use the information to work out what the chances are of you paying back what you owe. Hard searches are also visible to other lenders who check your report for creditworthiness.

The opposite of a hard search is a soft search which is usually only carried out to confirm your identity.

Can I check my credit report?

Yes, you can, by going to each of the three main credit reference agencies (CRAs) who hold information about you: Experian, ClearScore, and TransUnion.

By law, the details they have must be correct, so if you spot any inaccuracies (even typos) you should let them know. It’s free to check your report, simply head to:

Should I keep applying for a mobile phone deal if I’ve been refused?

No one can stop you applying for another mobile phone deal but if you’ve been declined once, there’s a reasonably high probability that you’ll be refused again. The problem isn’t so much that your applications might be rejected, it’s that other phone providers will see you’ve applied for credit multiple times (remember – a hard search is visible to others).

Lots of applications for credit can serve as a bit of a warning to lenders and make them reluctant to extend credit to you.

So, what should I do if I’m refused a mobile phone deal?

The simplest option is to go with a pay-as-you-go SIM and use this with an existing handset. As this isn’t a contract, you won’t undergo a credit check but you may have to unlock your phone if you’re switching network provider. It’s relatively simple to do this and your current operator will usually have a process that you can follow.

You could also apply for a SIM-only monthly deal. This is where you have a contract for the SIM which covers data allowance, minutes and texts but won’t have the added expense of a handset. Because this is a contract deal, you can expect a credit check to be carried out. However, as the repayments are typically much smaller, you may stand a better chance of being approved.

Finally, you could try finding a cheaper monthly plan with a less expensive handset. Nevertheless, it’s important to be aware that every time you do apply for credit (and are rejected) it can make it even harder to get credit in future.

Read more in our article Do I need a credit check for a mobile phone deal?

How can I improve my credit rating

When it comes to improving your credit score, there’s no easy fix. That said, it can be done – in fact, we’ve put together an entire guide on on_current="true" url="/new-year-new-improved-credit-score-heres-10-tips-boost-your-creditworthiness-2023" title=""how to boost your creditworthiness, but here are our top five tips:

  1. Correct mistakes on your report – if there are any inaccuracies, this is likely to be the quickest way to improve your score. CRAs have 28 days to respond to any queries.
  2. Add yourself to the electoral roll – registering to vote takes about five minutes at GOV.UK and it helps lenders confirm your identity.
  3. Don’t use all your credit limit – it sounds counterintuitive, but experts recommend you only borrow around 30% of your credit limit.
  4. Cut financial links – if your records are still showing a financial link to an ex, you should contact the CRA and have your records updated, because if they have a poor score, it could be affecting yours too.
  5. Pay bills on time – it sounds so easy but if you’re juggling multiple bills it can be easy to forget. It’s worth setting reminders so you always pay on time (and if you can, paying more than the minimum on credit cards can also help).

You can start your search for a monthly contract or SIM-only deals here with NimbleFins and Uswitch, together, we can help you find a phone deal to suit both you and your budget. Or first read more about the best mobile phone deals in the market.


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