Your credit history is a way for future lenders to judge how well you have managed credit in the past.
When you apply for a loan, credit card or a mortgage, your credit history will be checked and lenders will be able to see your details and financial history.
This means that as a general rule, utility bills shouldn’t appear on your credit report as they are not a form of credit. However, the decision ultimately rests in the hands of your energy supplier.
Your payment track record
While paying your utility bills on time is unlikely to help improve your credit history, missed payments can sometimes work against you. Depending on the energy supplier, details of any missed or late payments could be passed on to any of the three main credit reference agencies – Experian, Equifax and CallCredit.
Some firms have agreed to forward details of missed payments to credit reference agencies, where some may pass on all payment history (including when you’ve paid on time) and others may not pass any information on at all.
It is often the case that only when you’ve defaulted on a payment will it be reported to a credit reference agency, but more and more utility firms are changing to also report on when you pay on time and when you don’t instead. Again, just how they decide to report your information to the credit reference agencies – if at all – is down to each company’s individual policies.
If you’re unsure about whether your utilities will appear on your credit history, get in touch with your energy supplier and ask them whether your repayment history is passed on to any of the credit reference agencies.
The importance of paying on time
Late payments may not always be reported to the credit reference agencies, but that’s not to say they don’t matter. If you’re frequently late repaying, or you miss payments altogether, you’re likely to be hit with charges if you don’t let your utility company know. Missing too many payments could result in your energy being cut off altogether, so it’s really important to remember to pay on time.
If you think you may struggle to make a payment, it’s vital you let your energy provider know before the missed payment is due. Most firms have their own rules in place and will be happy to come to an agreement with you – such as putting you on a payment plan. This can help you spread the cost of what you owe. But, you won’t be able to do this unless you get in contact with them first and let them know you’re struggling.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.