Three Mistakes to Avoid If Denied Bad Credit Mobile Phones
For many people, being turned down from getting the best mobile phone contract because of poor credit is very distressing. Well, all is not lost because you can still get the same phone by talking to the phone company direct, raising some deposit, selecting dealers specializing in bad credit mobile phones, or settling for a SIM only contract.
When many people are denied bad credit contracts because of low credit scores, most of them rush to apply from a different company. This is a great mistake because such regular applications and denials pull down your score and compromise the ability to get your phone of choice in future.
Top 3 mistakes to avoid if denied bad credit mobile phones
Taking other loans to clear the outstanding debts
When people are told that Amount Owed contributes about 30% of bad credit score, the first thing is considering how to clear them. However, you should avoid the mistake of taking another loan to clear the old ones. This is because the new loan only sinks you deeper into debt by adding the overall interest being paid per month. To clear outstanding debts, think of areas in your life that you can reduce spending. Good examples include carrying packed food to work as opposed to eating in a restaurant, cycling to work as opposed to driving, and reducing the amount spent on luxury.
Not correcting your credit report with agencies
After being denied your credit score, failing to check with credit reference agencies is a great mistake. While they strive to make their information as correct as possible, many are the times they contain errors that pull down your score. In the process of gathering information, errors can occur and bring about poor credit ratings. Besides, financial institutions you have been dealing with such as banks, credit card companies, mortgage firms, and insurance firms might submit erroneous reports or fail to submit the info. By getting your report, it is easy to identify possible inconsistencies and have them corrected to reflect the right score.
Failing to learn about your credit score
While you have been denied bad credit mobile phones, the truth is that other problems could be on the way. For example, as a high-risk party, some insurance companies might turn you down while others price their premiums very high. Therefore, you must understand what credit score is all about and how to address it.
The credit score is calculated from five main factors; Payment history, owed debts, new credit, the length of credit history and credit mix. The most important are the first two because they account for 65% of your credit score rating. Therefore, you should start clearing the debts immediately and build on payment history. For example, you can take short loans and repay them on time to build the score over time.
Bad credit mobile phones should give you a new way to look at finances holistically. While there are several options for getting a bad credit mobile phone, the most important thing is working on how to get out of debt and building your credit score. Make sure to avoid the outlined three mistakes at all times.