How to Finance a Phone with Bad Credit

How to Finance a Phone with Bad Credit

When you’re dealing with bad credit, it’s only natural to feel as though everything is much more expensive – all the way down to your cell phone. We understand that you need such a device though, so avoid the hassle and choose the best payday loans online for bad credit instead of cell phone financing of any kind!

There was a time when having a cell phone was considered a luxury – to the contrary of today. Less than 20 years ago, only rich and powerful businessmen had the funds to pay for a mobile phone that didn’t fit in one’s pocket and literally costed a fortune.
The cell phone has of course become more more affordable, however have you ever wondered how a bad credit score might influence your ability to obtain one?

Credit Score – An Overview

Prior to getting into the knitty-gritty in terms of how a poor credit rating can determine whether or not you qualify for a cellphone contract, let’s freshen up on what a credit score actually is.

Simply put, a person’s credit score is a 3-digit number compiled from three major credit bureaus: Experian, Transunion and Equifax. Credit reports from all three of the later bureaus play on credit rating. The FICO Score is known as the most common credit score and ranges on a scale from 300 to 850. The more one’s score approaches 850, the greater chances one has at obtaining a loan – the same goes for interest rates too!

Generally speaking, any credit score lower than 650 is considered poor. When situated within this range or lower, it becomes highly difficult to qualify for a loan – let alone a credit card application. In this case, many individuals choose to settle for bad credit loans or no-check loans, many of which come with outrageous fees and alarming interest rates.

However, a loan isn’t the only element that a negative credit score can affect. In fact, credit verifications are also performed when attempting to purchase a vehicle, acquire an insurance plan and, as earlier mentioned, when obtaining a cell phone.

Obtaining a Cell Phone: Does Credit Score have a Strong Impact?

It is well known that when purchasing a new cell phone in-store, most providers perform a credit check.

The latter is a measurement of how reliable an applicant is in paying back their debts and managing their credit. If an individual has a positive history of paying their bills, than the provider can determine that such will be the same for your cell phone payments. The same goes for the opposing situation: If you have a negative history in terms of paying your bills on time, then a provider may not be willing to take the risk in offering you a contract whatsoever.

Although a poor credit score doesn’t necessarily go hand in hand with being irresponsible, many lenders see it this way and won’t take the time to hear you out on personal financial how your financial problems are a story of the past.

Paying off your debts, paying all bills on time and using your credit cards reasonably are definite ways to improve your credit rating and eventually, obtain a cell phone plan or contract. However, rebuilding one’s credit score positively can take time and you’ll probably require a phone before that. Guess what! You still have other options. Let’s take a look:

Pay a Larger Deposit on your New Phone

Although this option might appear pricey on the spot, it actually comes with its own benefits as well. In this scenario, you can purchase a new phone on contract, however you must first pay a greater balance on the phone’s total price. Following this one and only heftier payment, you may be left with even small monthly amounts than someone with good credit and a credit card!

The technique of paying upfront is nothing new. In fact, the latter can be beneficial when attempting to rent an apartment or sign for utilities. In certain cases, paying up front may also allow you to pay less overall – if willing to pay in totality and in cash!

When it comes to your new phone, sure, this means you have to save a little more money before purchasing what you need. A good tip is to make sure that your new cell phone comes with a good warranty – you don’t want your worthy investment getting damaged!

Paying up-front, however, isn’t always a possibility. If your credit rating is low enough, you may see yourself refused in terms of such a proposal. Certain providers may still offer you a prepaid option – beware though, this can often be much more expensive in the long run when compared to a traditional phone plan.

Hard Credit Checks Lower Credit Score

That’s right, you read right! If you know you have a bad credit score and won’t pass a said credit check, then sometimes it’s simply best to withhold yourself, to refuse the credit check or at the least, request a soft check. In terms of a credit check from a phone provider, such is usually a hard-check and therefore, temporarily damaging to your credit score.

By obtaining instead an online payday loan for bad credit, you’ll have higher chances of being capable of either paying for a certain amount of your cell phone up front or taking the prepaid route so avoid all the hassle, the hard-credit checks and start searching for the best!