Consumers with bad credit face difficulties when they want to sign up for a cell phone contract: They often fail the credit check. But this is no reason to despair. You have several options to arrange a cell phone contract without a credit check or with liberal credit criteria.
Different creditworthiness criteria for providers and tariffs
Many people with poor credit ratings wonder how likely they are to get a mobile phone contract. This cannot be answered in a general way for several reasons. First, the service providers do not publish any concrete information about their creditworthiness criteria. They do not want to disclose this data to the competition and want to retain flexibility in individual decisions. Second, the criteria differ between companies. This is the experience that consumer advocates, among others, point to. With identical credit ratings there are some providers say no, competitors grant a cell phone contract. Thirdly, it depends on the type of the tariff. Companies demand a good credit rating for extensive rate packages; they act more generously with basic packages with low costs.
In addition, consumers should note that there are many gradations in the assessment of creditworthiness. The major credit agency Schufa uses, for example, reported payment defaults and socio-demographic data, on this basis it creates a personal Schufa score between 0 and 100. The score indicates how likely customers are to meet their payment obligations. In this assessment, payment misconduct plays a significant role, it goes into the assessment to a greatly varying degree. In the best case, it is a reminder procedure where consumers have long since settled the bill. At the other extreme, they are in private insolvency proceedings. If the first applies, there are good chances of obtaining a cell phone contract with or without a credit check. In the case of serious payment defaults and ongoing proceedings, this option is not available; those affected should explicitly look for a cell phone contract without a credit check.
Tips: How customers increase their chances
Many consumers do not know what relevant credit agencies such as Schufa have stored about them and how they assess creditworthiness. It is advisable to check this before looking for a cell phone contract without a credit check. The law provides that every private person can request a free self-disclosure once a year. This is true for all credit reporting agencies. Everyone should make use of this right. Errors creep into the records of some service providers because they mix up people. In some cases, they also forget to delete past payment defaults after the deadline expires. Affected parties should immediately request correction of incorrect information.
Another tip: If you have a moderately poor credit rating, you should rely on the principle of hope. Requests cost nothing. In the case of a below-average credit rating due to manageable payment defaults, some providers will refuse a contract, others will agree to it. After a rejection, consumers should try their luck with the next company. Wisely choose inexpensive tariffs with a low level of services, this increases the likelihood of getting a mobile plan. Performance packages including a valuable smartphone and a two-year term should be avoided if these conditions are met; companies apply strict creditworthiness criteria to these tariffs. Instead, short-term contracts and the separate purchase of the cell phone are recommended. Several service providers also explicitly offer a cell phone contract without a credit check. They completely abandon a look at the Schufa data and information from other companies. In return, they protect themselves with a deposit or, as with prepaid plans, upfront payments. In the case of a security deposit, customers deposit an amount of money; this procedure works in a similar way to a rental deposit. If payments are missed, the company sends reminders. After a certain period of time without receiving money, it cancels the contract and keeps the deposit. Consumers should expect to pay a low triple-digit amount as a security deposit on this type of cell phone contract without a credit check.
Classic cell phone contract without credit check: Prepaid rates
In the case of prepaid contracts, providers do not carry out a credit check, just as they do for contracts with a deposit. This is easy to explain: With such a cell phone contract without a credit check, they take no risk whatsoever. Customers have to load credit, only after that they can use the services such as calling, texting and mobile internet. Accordingly, the companies with prepaid rates can not make losses. For a long time, consumer protection agencies advised against prepaid contracts because customers had to pay immense fees. Nowadays, prepaid plans are competitive. There is fierce competition in the market, customers benefit in the form of low prices. For as little as ten euros a month, you can make toll-free calls and send text messages with a low-cost cell phone contract without a credit check, and the companies also provide a data package. The cost of topping up the balance is also kept within narrow limits. Almost all service providers allow direct debit from the current account. Either customers load their credit manually in their user account or they set a lower limit. If the balance falls below this limit, the provider automatically loads the agreed amount and debits it from the account a few working days later.
Finding the best cell phone contract without a credit check
Some consumers with poor credit make a serious mistake: out of desperation, they accept the next best offer. They are happy to sign a cell phone contract without a credit check under these conditions. They ignore the costs, which often leads to avoidable financial burdens. Instead, they should take some time to search for a cell phone contract without a credit check and compare a variety of tariffs with each other. On a comparison portal, they do this with minimal effort. Beforehand, they should analyze their usage behavior. The need should fit the scope of services of a cell phone tariff. Packages that are too extensive come with unnecessary additional costs. This is true even when benefits are too low. If, for example, the free minutes for a cell phone contract without a credit check are not enough, you may incur high costs for additional calls. Monthly data packages deserve a look: If users exhaust the volume, the company throttles the speed until the next billing period. Convenient surfing is no longer possible until then. Customers escape this with a more comprehensive data volume or with the option to flexibly book additional volume during the month. This flexibility is also a significant comparison criterion for a cell phone contract without a credit check.