Outstanding features of guaranteed mobile phone contracts
If you have never had bad credit, you might not be in a position to fully comprehend the struggles that those with a poor credit rating go through in order to get approved for a phone contract. In most instances, such individuals are forced to apply with many mobile phone contract providers with the hope that one of them would be lenient to approve their application. This was largely the case before the unveiling of bad credit mobile phones, guaranteed mobile phones as well as no credit check mobile phones in the UK.
The unveiling of the above mentioned 3 types of mobile phone contracts was received positively especially among those with a poor credit rating. Unlike standard mobile phone contracts that placed great emphasis on a person’s credit score, guaranteed mobile phone contracts overlooked this and set out to giving UK individuals with a poor credit score a lifeline in so far as mobile phone contracts are concerned.
Characteristics of guaranteed mobile phone contracts
As mentioned earlier, guaranteed mobile phone contracts do not dwell on a person’s credit score as a prerequisite for approval. When you apply for this kind of contract, you can be rest assured that you will not be subjected to credit checks and even if you do, the results would not in any way hamper your efforts to a snag a mobile phone contract but is rather used to hook you with the perfect mobile phone deal.
Guaranteed mobile phone contracts tend to attract high interest rates compared to ordinary or standard mobile phone contracts. The reasoning behind this is because mobile phone providers opine that the risks of bringing on board customers with poor credit rating is high and therefore a high interest rate is in order. What this specifically means is that a person is bound to pay more on a guaranteed mobile phone contract than is the case on a standard mobile phone contract.
While those on an ordinary mobile phone contract can commit to a minimum period of 12 months on their contract, those on a guaranteed mobile phone contract do not have the same privilege. Most UK providers offering guaranteed mobile phone contracts require that a person commit to a minimum contract length of 18 months and above. The maximum period is up to the customer based on their tastes and preferences. In essence, the longer the contract length, the less the amount of money you pay monthly and the vice versa is also true.
Considering that no credit checks are done, most providers tend to ask for an upfront deposit before they can approve ones application. This is mostly the case when a person is applying for a high end phone which essentially means more risk to the provider. To mitigate on the risks, most UK providers require a small deposit to be paid up front.
In light of the above, it is correct to say that even though guaranteed mobile phone contracts have been instrumental in helping people get access to mobile phone contracts their credit score status notwithstanding, there is also the risk of high interest rates as well as perks that pale in comparison to those under ordinary mobile phone contracts.