How a SIM-only mobile phone contract can help your credit score

Looking for ways to boost your credit score? Find out how a SIM-only mobile phone contract (with no credit check) can help.

Data from YouGov found that 12% of Brits were denied a financial product based on their credit rating between 2018 and 2021. For many, a phone contract may be the first time they’ve had a credit search on their file, even if it’s for an affordable SIM-only deal.

Research by Opinium showed that 55% of Brits found it unfair that a lack of credit history could negatively impact their credit score and that acquiring a contract from a mobile network provider relied on such.

SIM-only deals are becoming more popular

While most major mobile network providers will require a credit check, the Uswitch mobiles experts have found that demand for no credit check SIM-only contracts has risen by an average of 18% in the past year.

In general, there are nearly 20,000 searches a month in the UK for advice on getting a phone contract with poor credit As average mobile plan prices rose by as much as 17.3% from 1 April, the use of credit also increased during the cost-of-living crisis.

So UK mobile phone users may be looking for an affordable SIM-only deal that won’t harm their credit rating.

What is a SIM-only deal?

A SIM-only deal includes your mobile service (texts, minutes, and data) only. Unlike other monthly contracts it doesn’t include your handset.

When you sign up for a SIM-only contract you’ll be sent a new SIM card which you put into your exiting phone.

How can a SIM-only contract help your credit score?

Many mobile phone companies don’t conduct credit checks for a SIM-only contract, as the term length is less than six months. (If they do insist on a credit check, this is usually more relaxed than normal monthly contracts as they aren’t providing you with a handset.)

SIM-only contracts aren’t a form of credit as you’re not borrowing money in advance. Instead, you pay a fee each month before your new minutes, data, and texts are added. This means it won’t impact on your credit score.

But, if you opt to pay via Direct Debit each month, a SIM-only contract can help to boost your credit score as it shows that you are reliable.

What SIM-only deals are available?

Here are some deals currently available:

ProviderCredit Check TermsCurrent cheapest SIM-only deal
giffgaffNo credit check required£6 a month, 2GB of data
VOXINo minimum credit score requirement£10 a month, 30GB of data
SMARTYNo credit check required£6 a month, 5GB of data
LebaraNo credit check required£1.58 (for 3 months), £3.95 after, 1GB of data

Check how much data you might need before committing

While providers such as giffgaff offer low-cost options, be wary of how much data you may actually need. The lowest cost options are also data-lite, which means using TikTok or Netflix to stream while using mobile data could see you run out fast if you’re on a 2GB a month plan, for example.

VOXI’s cheapest offer at the moment is a £10 a month SIM-only deal, which includes a solid 30GB of data. VOXI offer unlimited data specifically on social media apps, which are some of the most data-hungry – meaning that that 30GB could go far further if choosing a VOXI deal.

The current cheapest deal on Uswitch from a provider with no credit checks is from Lebara, which is offering 1GB of data for £1.58 a month for the first 3 months. Nonetheless, should you frequently find yourself on the move, travelling, or in locations with unreliable Wi-Fi access, you might quickly exhaust your data allowance.

What to look for when choosing a SIM-only contract

Uswitch mobiles expert, Max Beckett, has some important recommendations on applying for a SIM-only contract without credit checks, and what to look out for if you’re navigating the market.

When choosing a SIM-only provider, make sure you read their payment terms and conditions to see if they run a credit check on new accounts. Providers that don’t run credit checks are a great option for those with no credit history, or who may have been rejected for a contract previously.

Keep in mind the length of the contract, too. A rolling monthly SIM-only plan is likely to be seen as lower risk, which means they don’t often need a credit check. Six, 12 or 18-month contracts are longer commitments, so some providers would want to make sure you can pay a fixed amount for that length of time.

However, rolling contracts often come with higher monthly prices as a result. So if you’re looking for a lower-cost deal then you may have to commit to a longer contract, which means a no credit check SIM provider could still be your best bet.

Photo by Jenny Ueberberg