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Why They Should or Should Not Do Credit Check When Signing A Mobile Phone Contact

The world is full of mobile phones. It has reached a point where lacking one is a taboo. The first thing to do after you get a cellphone is to get into a contract with your service provider so that you can get connected.

mobile phone

Well, most service providers want financially stable people so that they are sure they will pay their monthly bills on time. To ascertain this, they tend to do credit checks before they can allow you to use their services. The question is, are credit checks really necessary for when signing a contract?

From The Service Provider Point of View

Yes, credit checks when signing a mobile phone contract are vital. This is because the service provider wants to deal with people who pay their bills on time. Any slight delay will inconvenience the company. Remember that once you have defaulted your payment, they will have to cover your end as they wait for you to make the payment. This often leaves them with a financial burden they never intended to have.

That is why you will find it quite hard to come across a service provider who performs no credit checks before entering into a contract with you. They just can’t risk to do it. The frequently asked question is why they should check your credit and yet they are not lending you money? Well, the service they provide is a financial obligation, and the only way to be sure you will meet that financial requirements are by performing credit checks.

From your point of view

No, it is not necessary. Mobile phones have become part of human beings. It is no longer a luxury but a necessity. Everyone who enters into a mobile phone contract knows that he or she must remain connected at all times. That alone is enough to push him or her to make mobile phone payments on time. So whether you have a good or poor credit history, it has nothing to do with your mobile phone contract.

Even though a mobile phone contract is a financial obligation, it is not a loan offered to an individual. The companies performing credit checks before issuing mobile phones are merely insecure. Doing that shows that they lack trust in their customers and that is not a good sign.

What should you do to be on the safe side?

For you to be on the safe side, you need to ensure that you have a good credit score. In case you have a poor credit history, you have to start taking note of your financial footprints to improve your credit score. If you use a service provider who performs no credit checks, then you should be thankful. This is not just because no one will go around snooping your financial records but because no hard inquiries will be made on your account. Hard inquiries can easily lower your credit score, which will finally give you poor credit history.

The question of whether it is necessary for credit checks when signing a mobile phone contract thus depends on which point of view. It is, however, only ideal if service providers would reconsider credit checks. Every hard inquiry puts a dent in your financial history, given that it is hard to improve your credit score. Regardless of the fear that you might end up defaulting your mobile phone payment, it is not ideal to have a look at the financial records of a client who has picked your services instead of the many others available. It is thus not necessary to perform a credit check when signing a mobile phone contract.

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