The credit system has been instrumental in making the global economy work. From funding businesses to mortgages that help to purchase homes and car loans, credit has been a savior when people and businesses run out of cash and need to be bailed out one way or the other.
Smartphones and, more generally, mobile phones are a space in which credit has become very useful. Phone contracts allow people who do not have cash at hand to get phones in advance and spread their payments over time. It has recently become so easy that you can even buy contract phones online. Make no mistakes, the credit system does not automatically dole out money to every Tom, Dick, and Harry who asks. The system works based on trust; for a company to grant you a phone contract, they have to be sure that you are likely to pay back. Usually, an important indicator of financial integrity is the credit score which shows your historical performance on previous loans.
For this reason, people with lower credit ratings may not find it easy to buy phones with bad credit. However, this does not necessarily have to be the case. Even if your credit score doesn’t look so perfect, you can still get a company willing to offer a contract providing you with mobiles for bad debt. However, the first step to making this work is understanding how to check if you’re eligible for a phone contract. There are two major ways to get this done and these include:
- Estimate your credit score
While there are official ways to find out what your exact credit score is, you can get a rough idea of what your current credit score is by taking a look at your previous transactions and financial history. What’s the balance on your credit card? Do you regularly overdraw it or do you pay off your balance regularly? If you have a large balance to pay off and your card is in the red, your credit score is probably not so good and the probability of qualifying for a phone contract is low. Also, if you’ve defaulted on any other loans in the past: Student loans, mortgages, car loans, etc, it will definitely result in a bad credit score and, again, lower your chances of qualifying for a phone contract
- Contact a phone store or agency
Not all lenders check your official credit scores before issuing a phone contract. For some, it’s enough to be able to verify your identity and ascertain that you have a steady income source. Regardless of your present credit rating, you should still reach out either to an online store or brick and mortar store to see if they have an offer that may fit your needs.
A low credit rating does not have to disqualify you from owning a phone as long as you are able to identify it and reach out to the appropriate lenders.