How a guaranteed phone contract can change your credit score status

 

When the final chapter on the history of mobile phone contracts is written, one thing that is for sure is the fact that guaranteed phone contracts played an integral role in alleviating inequality. We canít begin to imagine the pain, the desperation and the disappointment that scores of UK citizens contended with prior to the unveiling of phone contracts for those with a less than stellar credit score. Thousands of people were locked out simply because they were seen as high risk. While this was the order of the day prior to the financial turmoil of 2008, most phone providers in the UK changed the tune in the aftermath.

It became apparent that even the most stable of companies were affected and some even went under. Individuals who initially had no problem with their finances found themselves in the deeper end of the pool. It was therefore not feasible for phone providers as well as financial institutions to keep on tightening the noose or rather set harsh conditions before a person could be approved for a phone contract. In response to this change of events and the need to bring many customers on board, contract phones for bad credit were born.

In their own wisdom, most phone providers finally made the discovery that playing hardball would see them running out of business if they kept locking out a big chunk of customers based on their credit score. To level the playing field and give individuals a second chance, guaranteed phone contracts became a reality. In essence, the introduction of guaranteed contracts in the UK market was a welcome relief. Individuals reeling from poor credit rating either by design or default had a second chance at redemption.

This is because as the name states, guaranteed contracts gave scores of customers from the UK with a poor credit rating an opportunity to apply and be approved for a phone contract without having to contend with the nightmare of credit checks. Soon enough though, the question shifted to how guaranteed phone contracts could positively impact a personís credit score. As you already know, before guaranteed contracts were conceptualized, those with a less than average credit score had no avenue to improve their credit score.

Every effort to apply for a phone contract was slapped with a rejection and by so doing, improving one's credit status became a tall order. However, the landscape changed with the unveiling of guaranteed mobile phone contracts. Provided that a person made their monthly payments diligently, it positively affected their credit rating. The reason people have a poor credit rating is because of defaults in making credit card payments, bills, and loans and so on and so forth. Considering the fact that guaranteed phone contracts didnít take into consideration a personís credit rating, it gave them an avenue to redeem themselves and gradually improve their credit score status.

In other words, individuals whose credit score has taken a nosedive could actually change their fortunes by applying for a guaranteed phone contract. The trick is in ensuring that no payment is ever missed. Within no time, one would start to see the results!