Credit Scores and Mobile Phone Contracts

What credit rating is needed for a phone contract?


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By Cai Bradley
Updated on Wednesday 28 October 2020

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When you get a mobile phone contract in the UK, the network will almost certainly check your credit score.

Luckily for many, phone contracts are relatively easy to get accepted for (in comparison to mortgages, credit cards and loans), so most people will be fine. However, those with very poor credit scores may be rejected when they apply for a phone contract, which can make life difficult.

In this article, we explain why your credit score and report has an impact on your phone contract, what the minimum rating might be to be accepted, and whether you can get a deal with a poor credit history.

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What is a credit score and how does it work?

Your credit score is essentially a three-figure representation of your overall financial health. It is based on information found within your credit report, including your credit applications, payment history and the accounts under your name.

This information is what lenders see when they asses your creditworthiness when you apply for credit, whether it’s a loan, mortgage, credit card or mobile phone contract.

Why does your credit score affect your mobile phone contract?

Most people now pay for their mobile phones through a contract, meaning that they usually pay an up-front fee and then monthly instalments for 12 to 24 months or more thereafter.

These monthly payments cover the remaining cost of the handset and the usage (calls, text and data).

The monthly fee of a mobile phone contract is considered a form of credit (borrowing), as you don’t pay for it until after you have used the service, which is why networks must check your creditworthiness.

Because it’s technically a form of credit – albeit not a traditional one – networks must undertake a credit check on all customers who wish to take out a mobile phone contract.

So, what credit score do you need for a phone contract?

What is the minimum credit score for a mobile phone contract?

There is no exact credit score that you must achieve before taking out a mobile phone contract, but you should usually avoid applying for one if you have a very poor history of borrowing.

Generally speaking, mobile phone contracts are easier to be accepted for than other forms of credit – such as loans and mortgages in particular. This is because it is usually not an overly significant amount that you are required to pay, and also because mobile phone networks need to sell contracts, so they’re unlikely to refuse you as a customer unless your credit score is alarmingly poor.

There is no minimum credit score to get a phone contract, but you should always aim to have a ‘good’ or ‘excellent’ rating in order to give you the best chance of being eligible for the most competitive deals on the market.

Read more: What is a Good Credit Score?

To check your credit score, head over to multi-agency credit reporting site, Checkmyfile, which is free for 30 days and £14.99 per month thereafter (and it’s easy to cancel).

If you find that your credit score is poor and want to improve it (which you should do before applying for credit), read our tips on how to build a better credit score in the UK.

Paying more for your mobile phone due to a poor credit score

People with poor credit scores won’t always be refused a mobile phone contract, but they could face other restrictions. This includes a larger up-front cost, monthly usage limits, and more expensive deals.

Note: As a rule of thumb, more expensive and newer mobile phones will require a better credit rating. Cheaper handsets may be a better option for those with a bad credit score.

Low credit score mobile phone contracts

Mobile phone contracts are all relatively easy to be accepted for, but if you think that you might struggle (due to a poor credit score or an insufficient credit history), there are some networks that are traditionally more lenient.

Three UK and Vodafone are reportedly the most lenient networks when it comes to credit checks, so you may want to consider applying to one of them if your credit score isn’t the best.

If you are worried that you may not be accepted for a cheap device with Three or Vodafone, you may want to look into contracts with no credit checks at all.

Contracts without credit checks

There are some networks that offer mobile phone contracts with no credit checks, but it’s unlikely that the best and most valuable phones will be available on these deals.

Some mobile phones can cost over a thousand pounds nowadays – the iPhone 11 Pro currently starts from £1,049, for example – so it’s not surprising that networks are required to conduct credit searches before offering devices of that value to customers for a monthly fee.

Why was your mobile phone contract refused?

If you applied for a mobile phone contract and it was refused due to your credit status, the first thing you should do is check your credit score to determine what may have caused it.

Your credit application could have been rejected due to:

  • Missed payments

  • A poor credit rating

  • An insufficient credit history

  • Your employment status

  • Bankruptcies and County Court Judgements (CCJs)

  • Identity theft

You should avoid applying for a mobile phone contract if you have a poor credit rating, as it can make it far more difficult to get credit in the future.

Having a rejected credit application on your report is not a good look, and it will affect your chances of getting the best phone contracts, loans, mortgages and any other form of credit in the future.

There are many ways to improve your credit score, so be sure to do this and check your credit report regularly before applying for a mobile phone contract.

How does a mobile phone contract affect your credit score?

A mobile phone contract can have a positive impact on your credit report and score, as long as you consistently make repayments on time, because it shows that you are a reliable borrower and helps you build a credit history.

However, if you make late payments or miss them completely, your credit rating will be damaged.

So, when you take out a mobile phone contract, make sure that you can afford to pay the monthly payments comfortably, as missed instalments will cause your credit score to decrease.

Check your credit score and improve it

Your credit score is a crucial indicator of your overall financial health, so you must check it regularly to put yourself in the best position for borrowing.

You can check your credit score and report with four of the major credit reference agencies (CRAs) through Checkmyfile – a multi-agency credit reporting website in the UK:

Checkmyfile is available for free during a 30-day trial period, with those who continue with the service paying £14.99 a month thereafter. You can choose to cancel your account for free at any time, of course.

How to improve your credit rating to get a better deal

If you are worried about applying for a mobile phone contract because you have a below-average credit score, there are many things you can do beforehand to improve your rating.

To improve your credit score and increase your chances of getting the best mobile phone contract, you should:

  • Register on the electoral roll
  • Clear any excessive debt
  • Pay your bills on time in the months leading up to the application
  • Remove any financial associates that might be negatively impacting your rating
  • Limit your credit applications
  • Get a good credit utilisation rate if you have a credit card

It can take some time for these changes to improve your credit score, so you may need to plan ahead before applying for a mobile phone contract, but it will work in the long-run.

Having established that you need a relatively good credit score for a phone contract, it’s now time to check your rating and improve upon it if needs be, but remember, Three UK and Vodafone are the easiest networks to get a contract with if your score is low.

Check your credit score today using Checkmyfile’s 30-day free trial – it is £14.99 a month thereafter, but you can cancel at any time if you decide it’s not for you.

Or, alternatively, check out our related guides:


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