Applying for credit, whether it’s a credit card, loan or mortgage, can be a nerve-racking experience.
It doesn’t have to be if you’re on top of your finances though.
You may already know that your ability to manage your credit agreements by keeping up with your repayments will be taken into account by the lender you apply to, but what about your utility bill contracts?
Will a missed energy bill show up on my credit history?
When you apply for credit, one of the ways a lender decides whether or not to approve your application is by looking at your credit history. This way, they can see what lines of credit you currently have available to you and whether you’re managing them responsibly. If they can see that you’ve missed payments, they may decide that you won’t be able to manage if you borrow more.
If you have a credit card that you miss a payment on, or you have a store card with an outstanding balance you’ve not yet cleared, this could stand against you. But what if you’ve missed an energy bill payment?
Unfortunately, there’s no clear-cut answer to this question – it ultimately depends on who your energy provider is. Some utility companies have started to share their customer data with the credit reference agencies, but not all of them do this. So there’s no guarantee that an unpaid energy bill wouldn’t show up on your credit history and result in your application for credit being turned down.
The fact is, there’s more reasons to stay on top of your energy bills than just keeping your credit history blemish-free. For one, if you skip payments and ignore your bills, you could face a financial penalty. And if you keep on missing payments your utilities might even be cut – although this would be a last resort. But if your house is dark and freezing because your electricity and gas have been cut, your credit history will probably be the furthest thing from your mind.
If you find yourself in a situation where you’re struggling to afford your energy bills, contact your utility provider as soon as you’re able to and explain the situation to them. You should be able to come up with an agreement that’s more suitable for both of you.
Know your credit history
If you’re thinking of applying for credit, it’s a good idea to take a look at your credit history first. You can do this through one – or all – of the three main credit reference agencies; CallCredit, Experian and Equifax.
Even if you assumed your credit history was unblemished, it’s worth checking it to be sure. There might be out-of-date information – such as an address you no longer live at being listed as your current one or a credit account you’ve closed being listed as open – that could count against you. There may even be a mark left by a missed payment that you think you’ve made.
You can contact the credit reference agencies to ask to have these corrected, but if you don’t know what information your credit history contains you have no way of knowing if it’s wrong and at risk of working against you when you do apply for credit.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.