Good credit score but phone contract declined? Here’s why

It can be really frustrating to apply for a phone contract to see your application declined. Having a low credit score is one of the most common reasons why you’d be denied. That’s why if you have a good credit score, the declined contract can be even more frustrating. 

In this guide, we explore some of the other reasons why your phone contract may be declined, plus what you can do about it.

5 reasons why your phone contract may have been declined

1. You aren’t deemed to have enough disposable income

Mobile phones can be very expensive, and mobile phone companies will want to be confident you can afford it before they give you a contract. 

Phone companies will look at your credit report as part of this affordability check. But often, you’ll also be required to provide details of your income when you apply. If you don’t earn enough, your application may not be successful. 

Alternatively, if the phone network doesn’t think you can afford regular repayments, they may ask you to pay more upfront. 

2. You’re not on the Electoral Roll

When you apply for a phone contract, the network will likely also want to see proof that you are who you say you are. Part of this will be to check your address history, through third-party sources such as the Electoral Roll. 

The Electoral Roll is the register of the names and addresses of everyone who’s entitled to vote in the UK. Credit reference agencies (Experian, Equifax and TransUnion), banks, phone networks, and identity-checking services all use the Electoral Roll to verify your address. 

Whenever you move house, it’s important for your credit score to update your details on the Electoral Roll. If you don’t, lenders may struggle to verify your identity—and can decide to deny your contract on this basis.

3. You don’t have a fixed address

Similarly, if you don’t have a permanent address at all, you may find it difficult to get a phone contract approved. That’s because phone networks and other lenders use your address to understand your financial history and verify your identity. 

If you have a home but you’ve changed address many times in a short period, you may also have problems getting a phone contract. This is because you may be deemed to have a less stable situation, thereby increasing the perceived risk of lending to you. 

4. You’ve made a mistake on your application

Aside from a low credit score, the most common reason for your phone contract being declined is a mistake on your application form. 

This can range from a typo in your name or address, or a piece of information that the phone network couldn’t verify. For instance, if the address you provide doesn’t match the address listed on the Electoral Roll, you may be declined. 

That’s why it’s really important to be honest on your phone contract application. While it may not feel as important as other forms of borrowing money—such as getting a mortgage—all of the information you provide needs to be correct. 

If you deliberately provide incorrect information, your contract will be denied, and you may be breaking the law. 

5. Your credit report contains warning signs for lenders

While there are other reasons why your phone contract may have been declined, some kind of red flag to the phone company is most likely. These red flags aren’t necessarily reflected in your score, but can still be factors that indicate to lenders that you’re a risk. 

For example:

• You’re not on the Electoral Roll. As we mentioned above, this is a simple factor that can affect your ability to take out a loan.

• You’ve taken out lots of loans or lines of credit. For instance, if you have multiple phone contracts already, or many credit cards, you may struggle to open a new contract because lenders will not wish to overindebt you.

• You have a financial association with a low credit score. Financial associations are people you have a financial link with, such as a shared bank account. These are all listed on your credit report and many lenders check them when considering your application. Their score doesn’t impact your score, but the association is still noted.

• You’ve failed to repay a loan. If you’ve missed payments on a loan—even if it’s only once or twice, you may be seen as a higher risk for lenders.

• You used your credit card more than usual. If you’ve maxed out your credit card and you’re only making minimum monthly payments, for example, you may be seen as less appealing to phone companies. 

All of these factors can cause phone contract applications to be declined. So, even if you don’t think your credit report will affect your phone contract, it’s definitely worth checking it just in case. 

What to do if your phone contract has been declined

If you’ve recently had a phone contract declined, you can appeal the decision or improve your profile before reapplying. 

1. Appeal the decision

If your phone contract has been unexpectedly declined, you can appeal the decision. This is an option if you’re sure that you should have been approved—for instance, if you have a solid credit score, a stable address, and a sufficient income. 

You’ll need to get in touch with the phone network that declined you. You might find that you were declined just because you submitted some inaccurate information.

2. Don’t reapply immediately

During a contract application, the phone provider will check your credit report. Usually, they’ll do this with a “hard” credit check, meaning that it will be recorded on your credit report. The trouble is that too many checks in a short space of time can harm your credit score, because lenders may determine that you’re getting rejected regularly (for a reason). 

It might also suggest that you’ve been accepted for a lot of credit recently, which would result in your utilisation increasing drastically from what they can view on your credit report. This type of uncertainty is something that adds to the risk of lending.

This, in turn, might make it even more difficult to get a phone contract next time you apply.

So, before reapplying immediately, take some time to make sure everything is in order on your credit file. Get to know your credit history, check for issues such as incorrect information, identity theft, and forgotten debts (however small), and take steps to reinforce your credit health before applying again. This gives you the best possible chance of being accepted, and prevents you having to apply again and again in a short space of time. 

3. Consider changing the terms of your contract

Phone companies are sometimes more likely to offer you a contract if you purchase a cheaper phone or agree to pay more upfront. The affordability criteria will probably be more lenient, as you will essentially be borrowing less money.

4. Take steps to maintain (and keep improving) your credit score 

There’s always room for improvement. Maintaining a good credit score—and building on it—will make sure it’s never the reason you’re declined for a phone contract. 

There are a few things you can try in order to improve or maintain your credit score.

• Update your details on the Electoral Roll. Keeping your details up-to-date on the Electoral Roll is a really important first step to maintaining your credit score. It also helps phone companies check your identity. 

• Maintain your monthly repayments. Building a positive payment history improves your credit score over time. 

• See if you can remove financial associations from your credit file. If you no longer share a bank account with someone, you can apply to have them removed from your file. While this doesn’t directly impact your credit score, it does influence lenders’ decisions because you may be associated with someone who has a poor credit report. 

• Use a credit card responsibly. Using a credit card regularly, paying it off every month, can help you show prospective lenders and credit reference agencies that you’re a responsible, reliable borrower. It can improve your credit score. 

Your credit score can fluctuate over time. So, it can be really important to check it regularly. You can keep a close eye on your updated credit health through Checkmyfile; the most detailed credit report you can get.

Check in with your credit health

We break down up to six years of credit history into one simple-to-use, independent and highly confidential review. Here, you can understand your habits, pinpoint patterns and spot any errors that could be impacting your overall credit health — without affecting your score. Get started now