how do defaults work, please?

changkra

I don't often come on this board but i have a question about defaults if anyone can shine some light on how they work please. A good friend of mine had at least 3 defaults filed on his credit report from 2 years ago and is now on a debt management plan for another 4 years with the consumer credit counselling service. My understanding is that you cannot get credit if you have got a default and I've read on other forums and boards on here that many have been turned down for a mobile contract due to a sticky bit on their file. So my question is, how can someone with 3 defaults filed only 2 years ago manage to get a mobile phone contract with O2 which is for 18 months? I'm confused.:A

yhs4260

Having a default does not mean you will be declined. It just means that you have defaulted on payment. Should the creditor you are applying to not deem that default serious enough, they may accept your application. With mobile phones, the amount they actually 'finance' you in all reality is actually very low, the risk is entailed with large bills, which is why your friend may find his account is quite closely monitored and will quickly be dealt with if he does fall in to trouble (or appear to be going in that direction).

It is worth noting that not all mobile companies share this same method. Orange and Vodafone are extremely strict.
O2 and Virgin are leniant.
T-Mobile and Three are extremely leniant.

However, bear in mind that some of these companies change they're 'acceptance' profile depending on there business strategies and at which stage it is at.

changkra

Thank you for explaining that to me I always thought that a default would automatically stop you from gaining more credit, i am obviously wrong

Locana

T-Mobile registered a default with me about 2 years ago, and about 6 months later they gave me another 18 month contract!