Using a guaranteed mobile phone contract to help improve your bad credit rating status

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The penetration of mobile phones into the world market continues to grow at an unbelievable rate. In fact, it has been a little over 20 years since mobile phones became mainstream. In that time, they have become the gadget of choice for many, so much so that it is estimated that there are 6.8 billion mobile phone subscriptions on the planet.

That’s not handsets, it is just subscriptions – paid for contracts. Imagine how many active handsets there actually are. The thing is that it is not really that easy to get a mobile phone contract either, especially for those who suffer from a bad credit rating.

Most mobile phone providers will simply send you away if you apply for one. Their reasoning is sound as well. Although it may be through no fault of your own, you have defaulted on contract/credit payments before and they simply see you as too much of a risk to give you a monthly contract with a handset attached to it.

But that is where a guaranteed mobile phone contract comes in. Not only will a guaranteed mobile phone contract provider give you a contract with a decent handset but you can use this contract to actually improve your credit rating. This is something that you should be seriously trying to do at all times as a bad credit rating can really affect your life in so many ways.

How does it work?

But just how does a guaranteed mobile phone contract help to improve your credit rating? Let’s take a closer look.


A guaranteed mobile phone contract is a credit product, no matter what way you look at it. Even though it may be structured slightly differently to other mobile phone contracts, you are still signing a credit agreement. This means that for the handset and the right to use it (receiving a certain number of talk minutes, texts and data), you will need to pay a monthly contract fee.

This is a pretty big deal! Why? Well with a bad credit rating, the chances of been approved for any other credit products are ZERO! Credit cards, house mortgages, vehicle finance, personal loans or in fact, any type of credit product you can think of is beyond your reach. You will simply get turned down each and every time you apply for one. But with a guaranteed mobile phone contract, you have something that can be used to improve your credit rating slowly and effectively.

This is done simply by using it in an intelligent manner. You could even perhaps start by taking out a shorter sim-only contract for a period of six months. Using your old handset instead of a new one will keep the monthly costs down. It still remains a credit product, however, and by taking it out for a shorter period (there is no handset to pay off after all), you can quickly work on improving your credit rating.

After a six month period, you can take out a new contract. Do this a few times and your credit rating will quickly move into a more positive territory. Of course, you may still want a handset and by all means, if you do, rather take a contract with a handset attached to it. Note, however, this will obviously take longer to pay off, normally a 24-month contract and while it will still result in improving your credit rating, it obviously will take longer.

Finally, as your credit rating improves, you simply unlock the door to more credit products, even those from regular banking or financial institutions. Use these to further improve your credit rating but it is very important to remember to not overextend yourself at all. If you do, you may find yourself in a position where you have difficulty in paying off your loans, causing you to miss payments and start the bad credit process all over again.

Without a doubt, people suffering from bad credit ratings using a guaranteed mobile phone contract intelligently do not only get a handset but also the chance to improve their credit rating and their financial lives in the process.