How guaranteed phone contracts differ from standard phone contracts


If you are a greenhorn in the mobile phone industry or rather just hit 18 years and are thinking of applying for a phone contract, you probably are wondering what the difference is between an ordinary phone contract and a guaranteed phone contract. For one, please note that an ordinary contract in this case refers to a phone contract designed for individuals with a prior financial history and whose credit score can be said to be more than average. A guaranteed phone contract on the other hand, is for those whose credit score is less than average or rather have a history of CCJs, defaults as well as arrears. With that said, what are some of the outstanding differences between an ordinary phone contract and a guaranteed phone contract?

Friendliness to first-time applicants

If you’ve just become of age and are thinking of applying for a phone contract, you will be better off applying for a guaranteed phone contract as opposed to a standard phone contract. This is mainly because standard phone contracts accept individuals with an existing credit history. This of course makes it difficult to be approved especially if the providers have no way of telling how responsible you are financially. The same cannot be said of guaranteed phone contracts. They are ideal, not only for individuals with a worse credit history but also those with non-existent credit history.

Credit checks

This is the big elephant in the room and the reason most people do not have a phone contract. While credit checks are mandatory, ordinary phone contracts put a lot of emphasis on having a good credit rating prior to being approved. On the other hand, guaranteed phone contracts do not in any way deny you a contract phone based on credit check results. In any case, the results are suitably used to determine a good deal for the customer. In other words, for a standard phone contract, your credit score must be above average, for a guaranteed phone contract, your credit rating status is of no consequence.

Interest rates

While both contracts accord an individual the opportunity to use a phone and enjoy a number of perks, the staggering difference is in the interest rates. A person under guaranteed phone contracts is bound to pay more monthly than one on a standard contract. What this means is that a guaranteed phone contract is more expensive than an ordinary phone contract.

Contract length

Those on ordinary phone contracts have the leeway to be locked in a contract for 12 months or thereabout. The same cannot be said of guaranteed contracts as one must be locked in for not less than 18 months. This of course makes it difficult for a person under such a contract to switch should they want to before the expiry of their contract.