When you apply for a phone contract and you have bad credit, chances are high that you’ll be turned down. This is because you are tagged as a high risk borrower because of your bad credit history. If you’ve been refused elsewhere, there are a few alternatives you may want to check out. While you’re still trying to boost you credit score, alternatives to phone contracts are your best bet. Here are alternatives you consider in the meantime:
Pay As You Go (PAYG)
Pay as you go or PAYG deals are the type of plan that lets you top up your phone with credit in advance. This means no fixed monthly fees to worry about. Instead you pay only for the phone services you intend to use at the moment. With PAYG, you’ll have more control of your phone bill since you can set the amount of top up you can afford. Once the credit is used up, however, you will be unable to make calls, send texts or browse the Internet on your mobile until you top up again.
PAYG is recommended for light users who already owns a handset and who only need to use phone services occasionally.
Sim Only Contracts
Sim only contracts, on one hand, are plans that only offer customers a Sim card. It is a more affordable alternative for people with bad credit since there’s no handset included in the contract plan. This means the monthly fixed fee is significantly reduced compared to if you opt for a traditional phone contract deal.
Most providers also offer Sim only contracts with shorter terms. Rather than get tied up for 24 months to a hefty monthly fixed fee, some deals have more flexible and shorter contract terms. In fact, some options let you get out of the contract after a month.
Bad Credit Mobile Phones
If PAYG or Sim only contracts would not suffice for your needs, you can check out bad credit mobile phones. With the problems people with bad credit are faced with, more and more providers are now offering phone deals designed especially for people with bad credit. These deals, however, may be a bit more expensive than traditional phone contracts in terms of the monthly fee. But the upside, it is way easier to get approve for since most providers do not run credit check on their applicants.