Can You Get a Phone Contract with Bad Credit?
Mondo Admin / 24-07-2025 / Financial News
Been turned down for a phone contract because of your credit? You’re not alone. Around 80% of South Africans have hit that same wall. Networks have gotten stricter — and if your credit’s taken a few knocks or you’ve been blacklisted, getting a contract can feel impossible.
But here’s the good news: you can still get a contract, even with bad credit. You might just need to start small, be smart, and build your way up.
Why Networks Say No
Getting a phone contract is a bit like applying for a loan. When you go for a R10,000 device on a 24-month deal, the network’s taking a risk — and they want to make sure you’re good for it.
What They Check:
Any missed payments or defaults
Judgments or collections under your name
Your overall credit score
Whether you’re already deep in debt
Even if you’ve never had debt before, that can work against you too. No credit history = no proof that you can handle monthly payments. It’s a frustrating Catch-22: you need credit to build credit, but you need credit history to get started.
Your Income Matters Too
Even with a decent score, you can still be declined if your income doesn’t match the deal you’re going for. Networks want to know that you can comfortably afford the monthly payments and your other bills.
For example: If you earn R4,000/month and apply for a R500 contract, that’s more than 10% of your income — a red flag for many providers.
When You’ll Automatically Be Declined
Some things are deal-breakers, no matter what:
Debt Review: If you’re under debt counselling, the law says no new credit allowed.
Judgments: A court judgment against your name is a straight-up no.
Sequestration / Administration: Legal insolvency = not eligible.
So, What Can You Do?
Here’s how to turn a “no” into a “yes” — even with a not-so-great credit score:
Start Small
If you can’t get a top-end phone right now, don’t stress. Try applying for:
A SIM-only contract (no phone, just data & minutes)
A deal with a more affordable device
SIM-only is a great stepping stone. The risk to the network is lower, so your chances of getting approved are higher.
Pro tip: Use a smaller deal to prove you’re reliable — pay on time, every time — and you’ll open doors to bigger contracts later.
Build Your Payment Track Record
Got a SIM-only or entry-level deal? Great! Now the goal is simple: pay like a pro.
Every on-time payment gets reported to credit bureaus, helping you build (or rebuild) your score. After 6–12 months, you could qualify for an upgrade or a better phone.
New for 2025: Smarter Scoring, More Opportunity
MTN and TransUnion recently launched a game-changing feature: Telco Data Score. It looks at your mobile behaviour — like how often you recharge, call, and use data — instead of just your credit history.
That means:
No credit history? No problem.
You might qualify based on how you use your phone.
It’s early days, but it’s a step towards making contracts more accessible for everyone.
5 Steps to Boost Your Approval Odds
- Check Your Credit Report
Start here. It’s free from TransUnion, Experian or ClearScore. Look for:
Any mistakes you can fix
Old debt you can settle
Outdated info you can dispute
Small fixes can lead to big improvements!
- Don’t Apply Everywhere at Once
Getting declined sucks, but don’t spam every network. Each application hits your score.
Instead:
Wait 3–6 months between tries
Go for simpler plans first (SIM-only, cheaper phones)
Understand why you were declined before trying again
- Build Credit Elsewhere
Phone contracts aren’t the only way to build trust:
Open a small clothing or furniture store account
Try a secured credit card (with a deposit)
Make sure your utilities are in your name and paid on time
- Prove You’re Financially Stable
Before applying:
Stick with your job (avoid job-hopping)
Have your payslips, ID and proof of address ready
Avoid applying while under debt review
Preparation shows responsibility — and that counts.
- Go Prepaid While You Prep
Can’t get a contract yet? That’s okay.
Use prepaid while you build credit
Set aside the amount you’d spend on a contract each month
Save for a deposit to increase your approval odds later
Some providers even let you convert to a contract from prepaid without a new credit check.
Talk It Out
With Creditors: If you're struggling with payments, talk to them before they report you. You might be able to set up a payment plan that protects your credit.
With Networks: Be honest in your application. Explain your situation. Some providers are willing to help if they see you're serious about improving.
How Long Does It Take?
Mistakes to Avoid
Want to get approved? Don’t do these:
Apply while under debt review (it won’t work)
Skip documents or send blurry photos
Ignore old debts
Job-hop right before applying
Apply to 5 networks in 1 day (your score will take a hit)
The Final Word
Getting a contract with bad credit isn’t easy — but it’s totally doable. You just need a plan:
✅ Check your credit
✅ Start small
✅ Pay perfectly
✅ Upgrade when ready
✅ Be patient and consistent
Your credit situation doesn’t define you. And every smart move you make brings you closer to that shiny new smartphone deal.
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