Phone contract application declined? Here's why

Having your phone contract application declined can be a frustrating and confusing experience. It may even make you feel as if you’ve done something wrong in the past to result in such a decision - even if you have a perfect credit score and you don’t owe any outstanding debts.

Unfortunately, when you’re declined for a phone contract application, most networks and retailers aren’t particularly helpful, with rather vague reasons given, such as ‘credit check not passed.

However, there are several steps you can take to identify why you've been declined, and what you can do to improve your chances for your next phone contract application.

Why you’ve been declined

There are several reasons as to why you may have been declined for a phone contract application. The most common reason is having a low credit score. However, it can be something as simple as providing incorrect details on your application, such as from accidental misspellings.

Either way, there are several things you can do to identify why you have been declined, and how to improve your chances for any future applications.

You have a low credit score

Having a low credit score is the most common reason as to why you have been rejected for a phone contract.

A low credit score can often result from missed payments for loans or credit cards in the past. In most cases, these will leave marks on your credit report, which usually last for 6 years until they expire and no longer show.

Furthermore, if you have existing debts, you may have been issued with a CCJ (county court judgement), which happens when someone takes you to court for the money that you owe. This can significantly impact your credit score.

However, low credit scores aren’t always a result of previous missed payments for loans or credit cards.

You may have a low credit score if you haven’t built a reputation for repaying debts. For example, by having a credit card and consistently paying the monthly amount owed, you will increase your credit score and reputation. If you’ve never had a credit card or loan, or you haven’t had one in a while, then you haven’t had the opportunity to build your credit score.

A simple way to improve your credit score is to take out a credit card and consistently pay the monthly amount owed, making sure you do not miss a single payment. Over time, your reputation and score will increase.

You can check your credit score for free with services such as Credit Karma, TotallyMoney and ClearScore.

You’re unemployed or your monthly income is too low

Given how expensive the latest phones can be these days, networks and retailers have become more cautious when approving contracts, in order to reduce the risk of having customers who may miss monthly payments. You may be identified as a greater risk if your salary is deemed to be too low, or you're unemployed with little income.

If you’re self-employed, you will usually need at least 3 years minimum for proof of a stable income. Newly self-employed people will often be seen as a particularly high risk.

When applying for a phone contract, you will be asked for details about your income and your normal outgoings, such as rent, bills and dependants. The less disposable income you have at the end of each month, the more risky you will appear to networks.

It can be tempting to lie on your application by inflating your income in order to increase your chances of being accepted for a phone contract. However, this is against the law, and if you’re caught, it can leave an even bigger mark on your credit score for years to come.

If you have a low monthly income, fear not. You can increase your chances of being accepted for a phone contract by paying a larger upfront cost. The larger the upfront cost you pay, the less amount your loan will be, with lower monthly payments required. These types of contracts are significantly less risky for networks.

Furthermore, don't opt for the flagship phones, such as the Samsung Galaxy S24 and Apple iPhone 15. Instead, take a look at cheaper mid-range devices.

You’re not registered on the electoral roll

When applying for a phone contract, a network will try to verify your identity, in order to determine whether your application is fraudulent or not.

One of the first places a network will look is on the electoral roll. If you’re registered and your details match from your application, including your name and address, your identity will be significantly easier to identify.

Registering on the electoral roll is quick, easy and free. It can be done directly on the gov.uk website.

There are mistakes on your application

Any mistakes, whether deliberate or intentional, can significantly decrease the chances of your phone contract application being accepted.

Your details will be checked against existing records, such as previous loans, credit cards and the electoral roll.

Incorrect details, including misspellings of your name or address, may result in your identity being unverifiable.

Furthermore, mistakes from your salary or income details may not match with what’s on record.

When applying for a phone contract application, make sure to double check your details. Most networks and retailers will email your full application to you while they make a decision. If you spot a mistake, make sure to inform them as soon as possible, in order to prevent your application from being delayed or declined.

You’re a student with little income

Students, in particular young students, often have a low amount of income with little disposable income. These metrics will often appear risky to networks, resulting in a low chance of being accepted for a phone contract.

However, many networks offer contracts specifically tailored for students, with significant and exclusive discounts.

• EE student discounts
• Three student discount
• O2 student discounts
• Vodafone student discounts

Furthermore, if you’re a student, you may be better off buying a 1 month SIM contract and pairing with your existing phone. See our no credit check SIM only deals for more information.

You have existing loans or existing phone contracts

The more existing debt you have, the more of a risk you will be seen to networks, increasing your chances of your phone application being declined.

Existing debt can include credit cards, loans and current phone contracts. Your mortgage will not apply as an existing debt in most cases.

If your debt to income ratio is high, you can increase your chance of being accepted for a new phone contract by paying off existing debts before applying.

If you have an existing contract and you wish to take out a new contract, it’s best to contact your network directly rather than using comparison websites or applying online. Most networks will be able to accommodate or adjust your current contract, where appropriate and within reason.

You don’t have a fixed address or you’ve moved too many times in a short period

Most networks will require you to have a fixed address when applying for a phone contract. This is the address your monthly bills will be sent to.

Furthermore, if you’re a frequent mover, you may be deemed as someone who doesn’t have a permanent address. A phone contract is similar to a loan, which nearly always requires a fixed address. Those without a fixed address are see as a high risk, with more chance of an application being seen as fraudulent.

A fixed address will also help credit check companies to verify your identify and view your existing financial / credit history.

Appeal your decision

In some cases, your application may unexpectedly be declined, even though you believe it should have been approved.

If you believe your application has been wrongly declined, you can appeal your decision by contacting the network or retailer directly. Some will have a link on their website to do this, whilst others will require you to ring or email them.

You may believe your application has been wrongly declined if you have a good credit score without a recent history of missed payments, and you have a stable, strong income.

It is important that you do not reapply once your contract has been declined, as this can show up multiple times on your credit report history. This can negatively affect any future loan or mortgage applications.

How to improve your chances of being accepted for phone contract

There is never a guarantee that your phone contract application will be accepted.

However, there are several things you can do to improve your chances of being accepted, many of which are free and easy to do.

Register on the electoral roll

By registering on the electoral roll, you will be seen as someone who has a permanent address. This will help to verify your identity and speed up your application process.

Even if you don’t intend to vote, you can still register on the electoral roll.

Registering for the electoral roll is free and easy, and can be done through the gov.uk website.

Purchase a phone contract with a higher upfront cost

The lower the initial upfront cost you pay for your phone contract, the larger the ‘loan’ you will be taking out.

As a result, paying a high initial upfront cost is seen as less risky for networks, as the debt you owe isn’t as significant.

The lower the upfront cost, in particular contracts with a zero upfront cost, the more of a risk your application will be seen to networks.

From our research, only 25-30% of contracts with a £50 upfront cost or lower are accepted. Consistently, we’ve found the higher the upfront cost, the more chance an application has of being accepted.

Pay off existing debts

The less amount of loans you have, the more chance you have of being accepted for a phone contract. This still applies even if you don’t have any previous missed payments, and you are paying debts off on time.

However, if you have a low debt to income ratio, this won’t affect your application as much.

Build a credit reputation

You may have a low credit score even if you haven’t missed payments for previous loans. This is often as a result of not giving yourself a chance to build a credit reputation.

This is common for young people who have only recently been employed.

You can build your credit reputation and increase your score by getting a credit card and paying off the required monthly payments on time. As long as you consistently pay the minimum amount each month, your credit score will gradually increase over time.

Decide if you actually need a phone contract

A phone contract isn’t always a necessity, and may not offer the best value for money.

More times than not, it’s often cheaper to buy a phone outright and pair it with a 30 day SIM only deal.

However, this will require a larger initial investment, as you are purchasing the entire phone value upfront.