Remember when Apple launched its first iPhone? Well, the tech world has not been the same ever since. With new players like Samsung going head to head with Apple to create better, more advanced devices, smartphone prices have skyrocketed. Even average devices now cost around $600, which still can be too much to pay in one go.
For this reason, mobile carriers have come up with many competitive deals including “contract phones.” By signing a 24/48-month contract, you can get a new phone set and a monthly plan by paying just a fraction of the set’s cost upfront. Then, you need to pay monthly installments to cover the rest of the phone’s cost and your plan. Suffice to say, many customers are satisfied with such offers because they allow them to get the latest and greatest devices without breaking the bank. However, your mobile carrier may reject your contract phone application.
If this has happened to you recently and you are still scratching your head, trying to figure out where it went wrong, check out the following points to know more about the factors that might have made the carrier reject your application.
It seems like everything has to do with your credit score nowadays. Your credit score is a number that signifies your creditworthiness. The higher your credit score is, the easier it is to get loans, mortgages, or even contract phones. Nonetheless, you may still be unsure why many carriers place much importance on your credit score. Well, your credit score gives insight into your credit history, meaning that it can help the carrier gauge your level of responsibility when it comes to financial transactions.
It also helps these companies see if you have defaulted on repaying your loans or credit card debt. If you have had a couple of snags along the way that made you miss some of your monthly installments, then you might not meet the carrier’s requirements. So, in most cases, a bad credit score equals rejection.
Don’t lose hope yet, though. Having bad credit does not mean you cannot get a sweet contract phone offer, as plenty of contract phones no credit check deals are available. On the downside, they do not include the newest, most expensive phones. However, if you do not mind sticking with an older device for a year or two, you might be able to get an upgrade once you prove that you can, in fact, pay your monthly installments on time.
No Credit History
Some people have a spotless credit history, and by the word “spotless,” we mean non-existent. In this day and age, it might come off as a surprise that some still prefer to use cash to handle all their financial transactions. Yet, this is not really beyond the realm of possibility, as credit cards come with monthly payments and tons of other headache-inducing details that many people would just rather do without.
As much as you may be a responsible individual, without a credit history, any carrier will be reluctant to approve your application. Just think about it; how can the carrier guarantee that you will pay your installments on time when you have no prior history of sticking to monthly payments? To remedy this, you may want to apply for a credit card and start paying your monthly installments on time to build your credit score, then you can reapply for a contract phone.
If you have ever defaulted on repaying a loan, you may be familiar with the term “debt review.” Essentially, debt review is a process where one’s debt counselor tries to come up with a better repayment plan than the one they already have. This only happens when individuals are unable to pay back their loans due to a big disparity between their income and expenses. When applying for a contract phone, the carrier may discover that you are under debt review.
Of course, this can deem you irresponsible in their eyes, thus preventing you from getting the deals the carrier offers. If you are thinking about applying for a contract phone but are still under debt review, it is better to clear up your debts before taking this step.
Contract phones are great for people who want to enjoy the newest, state-of-the-art smartphones without burning a hole in their pocket. Yet, if you have applied for one and were rejected, several factors may be to blame. Bad credit, non-existent credit history, and debt review can be the possible culprits behind this rejection. Still, you may be able to get a contract phone if you settle for an older model and work your way up to an upgrade. It may take some time, but it remains a good option if you cannot afford to buy a new phone right away.
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