Refused a phone contract? Why it happens and what to do next

Why was I declined for a phone contract?

Networks do not have to tell you the exact reason, and often do not. Vodafone says its sales advisers only see whether you passed or failed, and that it cannot share what would change a decision because of fraud risk. The reason is usually one of a short list.

A pay monthly phone deal usually includes a device plan, which is regulated consumer credit. So the network runs the same kind of checks a lender would: who you are, how you have handled credit, and whether you can afford the monthly payments.

• The network could not confirm your identity or address, often because you are not on the electoral register or moved recently.
• Your credit history is thin: you have used little or no credit, or you are new to the UK.
• Late or missed payments, defaults or county court judgments (CCJs) on your file.
• An individual voluntary arrangement (IVA) or debt management plan.
• Several credit applications in a short space of time.
• A mistake on the application, such as an address written differently from how it appears on your file.
• A financial link to someone with a poor credit history.
• The network's affordability check: the monthly cost compared with your income and outgoings.
• No UK bank account or UK address. Vodafone lists this as a reason it declines.

Why can you be refused with a good credit score?

A credit score is only a guide. The score you see in an app is worked out by a credit reference agency, but the network makes its own decision using its own scoring system. MoneyHelper says a high score does not guarantee that any particular lender will offer you credit.

Vodafone says this directly: it uses its own scoring system, separate from the agencies', so you can fail its check even if an agency has given you a high score. It also looks at more than your credit history.

Affordability is the other common reason. MoneyHelper notes you can be refused with an excellent credit history if a lender thinks you cannot afford another credit commitment. A high-priced handset on a long plan is a bigger commitment than a cheaper one.

Experian adds that there is no universal pass mark. Each lender has its own criteria, and some only want certain types of customer.

How do you find out which credit reference agency was used?

Ask the network. If it turned down a regulated credit agreement, such as a device plan, because of information from a credit reference agency, section 157 of the Consumer Credit Act 1974 says it must tell you so and give you that agency's name, address and phone number.

You can also ask in writing for the name and address of any agency the network consulted. Send that request within 28 days of the application ending.

Many networks name their agencies on their own credit check or privacy pages. The table shows what four networks said when we checked.

If you are not sure which agency was used, check all three main agencies. They hold different information because lenders do not have to report to every agency.

Should you check your credit report before reapplying?

Yes. Experian says to find out why you were refused before you apply again, and your credit report is the only part of the decision you can see. Checking your own report is a soft search, so it does not affect your score.

Every credit reference agency must give you your statutory credit report free of charge, and you can ask as often as you like. MoneyHelper now lists a fourth agency, Crediva, alongside the three main ones.

• Experian: apply online and it posts you a passkey within 5 working days, or send the paper form by post. A free Experian account also gives ongoing access.
• Equifax: open a free Equifax Basic account to view and download it online, or post the paper form. Equifax says a posted report arrives within a calendar month.
• TransUnion: fill in the online request form, or post the form to its Consumer Services Team in Hull. It is free and does not affect your ability to get credit.
• Look for wrong addresses, accounts you do not recognise, late payments you did make on time, links to people you no longer share finances with, and whether you are on the electoral register.
• If something is wrong, tell the agency. MoneyHelper says it checks with the company that supplied the data, marks the entry as disputed while it investigates, and the process should take no longer than 28 days.
• If the agency and the lender will not fix an obvious error, you can complain to the Information Commissioner's Office (ICO).
• If an entry is accurate but needs context, such as missed payments after a job loss or illness, add a Notice of Correction of up to 200 words. Ask each agency that holds the entry. Experian says it does not change your score, but lenders will see it.
• If a joint account with an ex-partner or former housemate has closed, ask each agency for a notice of disassociation to break the financial link.

How long should you wait before applying again?

There is no set waiting time, but spacing applications out matters. Every application leaves a hard search that other lenders can see. MoneyHelper says hard searches can stay on your report for up to two years, and several in a short space of time can make lenders think you rely too much on credit.

Experian suggests aiming for no more than one credit application every three months. That also gives any corrections, electoral register updates or new payment history time to show. MoneyHelper says councils send voter data each month, so registering can help within about eight weeks.

Before applying again, use an eligibility checker that runs a soft search, if the network or a comparison site offers one. Being told you are likely to be accepted still does not mean you will be.

Can you appeal a network's credit decision?

Sometimes. Vodafone has a credit check appeal form and asks you to check your credit report with Experian, Equifax and TransUnion first. It says only a small number of appeals succeed.

Three uses automated decisions and says you can ask for your application to be reassessed by a person. Email credit.checking@contact.three.co.uk or write to Three Credit Operations within 14 days of the date of your application.

For other networks, ask customer services how to request a review. An appeal is most useful when you can show something the check missed, such as an error you have since corrected. Our guide to network credit checks covers each network's process in more detail.

What are your options while you rebuild?

You can stay connected without another credit application. None of these options is the right choice for everyone, and some still involve a check.

If money is tight, or you are behind with bills, free and confidential debt advice is available from MoneyHelper, StepChange (freephone 0800 138 1111) and Citizens Advice. Taking on a new phone contract is not a good idea if you are struggling with existing payments.

• A SIM-only plan with no credit check. Vodafone, for example, does not credit check its Pay as you go Plus plans. Pair one with your current phone.
• A 30-day rolling SIM-only plan. Some are sold without a credit check, and none ties you in for a long term. Check the plan's terms, because iD Mobile says its pay monthly SIM only plans will probably involve a check.
• Buy a phone outright. A SIM-free phone involves no credit agreement with the network, and a refurbished phone usually costs less than a new one.
• Choose a lower-cost handset. Borrowing less means a smaller monthly payment in the affordability check, although it does not mean you will be accepted.
• Wait, rebuild your credit file, then compare contracts that may suit a lower credit score.