Utility bills could now affect your credit score
Keeping on top of all your payments is important, whether it's a credit card or a water bill.
According to recent reports, some credit bureaus will now include your utility payment history in your credit report. Utility companies like your gas, electricity and water providers could actually make up 1/8th of businesses mentioned on your credit report. This could have huge implications for millions of Brits.
Including utility bills in credit reports will mean they more accurately reflect your financial situation as they give a wider overview of your spending. Previously, someone who pays their utility bills on time would not have been rewarded in credit terms. This change could mean that you see your credit score improve because credit bureaus are taking into account a fuller picture of your financial repayment history. You could therefore have more success in applying for credit and you might find you have greater access to better deals on the market.
Although this is great news for you if you have faced financial exclusion because you were unable to prove your creditworthiness, some could be negatively impacted by this. If you are finding it hard to pay your utility bills and your energy and water provider shares this information with a credit bureau, your score will be negatively affected. This could mean that those who are already struggling with money will be further marginalised in the financial sphere.
Another concern is that if you live in shared accommodation and pay bills together with your flatmates, you could be affected if they forget to pay. However, utility companies don’t usually link an account to two people unless they are sure that those two people are married. So you should only be worried about this if it’s your name on the bill.
The appearance of utilities on the credit report is an interesting trend and it has the potential to change the way you build and improve your credit score. We know that access to credit can affect your life in many ways, from getting that dream job, to getting the best deals available. Keeping an eye on your credit report will show you which utilities companies share information with the credit agencies, so that you know exactly what’s happening with your ‘financial CV’.