What is a credit rating?

Many people are confused about credit checks, bad credit, mobile phones and how to make sense of it all.  Part of the problem is that many companies are out to exploit people and make money from interest payments, as well as add-ons and products they don’t necessarily need.  This means it’s in their interest to keep it confusing on purpose, and leave people wondering what to do.

Firstly it’s important to understand what a credit rating is: essentially it’s a prediction about what your future behaviour is likely to be when it comes to repaying debts.  Since lending money to anyone always comes with the risk that they won’t be able to pay it back, lenders want to get as much information as possible about you before they lend you anything.  This includes committing to a mobile phone contract, as with no credit check, a lender wouldn’t know whether they could expect you to keep up with the monthly payments.

In accordance with UK law, there is no such thing as a universal credit score.  You won’t be blacklisted for having bad credit in the past, and pay monthly mobile phones with no credit checks are still available to you.  Credit checks are done by each lender and they decide what to ask about, so you might be turned down by one company’s checks and accepted by another.  That’s where we can help you at MobileCrazy – with our guaranteed mobile phone contracts, we’ll make sure you get approved regardless of what previous checks have resulted in.

Although it’s possible to get round having bad credit show up on checks, it’s a great idea to understand your rating so you can start working on improving it.  After all, even if you get accepted, that’s not the only function of a credit check.  Borrowing money with a bad credit rating will often mean the interest rates will be higher, and if you do miss future payments there could be heavy penalties.  Working on your credit rating is always a good idea, so here we offer a few ideas.

How to improve your credit rating

1) Make sure you don’t provide any false information.  It may be tempting to bend the truth if it makes your application sound better when applying for loans or mobile phone contracts, but no credit check would be useful if the information wasn’t corroborated.  In short: assume lenders will check all the facts, and make sure you’re 100% confident that all the information you provide is accurate.

2) Remember your rights.  You don’t have the right to borrow money for one thing, so unfortunately if your credit history is extremely poor it’s unlikely you will find a way round the problem.  Having said that, you do have the right to keep plenty of your information private.  Lenders can’t ask you about everything, and there are lots of myths about companies having full extensive personal details about everyone.  Keep track of what you’re entitled to and what you’re not, so if there are ever any issues you know how to resolve them.

3) Don’t trust companies offering to sell you a credit score.  The score itself isn’t that important because it varies depending on each different lender.  They come to a conclusion based on how they interpret the data in your credit file, which is what matters.  If you work on the facts i.e. genuinely paying back your debts, this will lead to generally better credit scores, so don’t get too concerned with just one.

4) Manually check your files whenever you need to apply for credit.  It wouldn’t be wise to walk into any situation without doing your research, and you can access your credit files without any lenders knowing you have done so, so there’s nothing to lose.

5) Using a credit card you can easily manage to rebuild your reputation.  People who haven’t borrowed much at all can also get rejected because there’s too little information for lenders to go on.  Building up a good history by borrowing small amounts and paying them off on time can be the best solution in most cases.  There are even a lot of credit rebuild cards specifically designed to help you do this.

6) Make sure you have proof of residency and are registered to vote in the UK.  Without these, it’s quite likely you won’t pass a credit check for a mobile phone contract.

7) Don’t let someone else’s credit become your problem.  If you have a partner or split up from someone with financial problems, you need to ensure their reputation doesn’t affect your chances of getting credit later.

8) Applying for credit too often from too many places can flag up as a problem in the eyes of lenders.  You risk looking desperate and this won’t make companies feel confident giving money to you.  When you’re eligible for credit, make sure you apply wisely.

9) Don’t use payday loans if you can avoid it, since they tend to bring huge problems with interest rates and fees if you do get into trouble and miss repayments.  This may show up on your credit score later and isn’t a good sign for potential creditors.

10) Don’t pay for a credit repair company to help you.  It’s very unlikely they will do anything that you can’t easily do yourself, and if they use other methods these are sometimes illegal and very dangerous for your future reputation if you get found out.  It’s vital to make sure you manage your finances and debts on your own as much as possible and take full responsibility for everything done in your name.

There are many more things you can do to improve your bad credit for mobile phone contract applications.  The key thing is to only accept help from reputable companies that care about helping you and giving you constructive advice.  At MobileCrazy we have a proven track record or working with our customers to secure mobile phone contracts with no credit checks and problems. If you have a bad credit problem you’re interested in how we can help you apply for pay monthly phone contracts, please feel free to get in touch with us at any time here.