How Do I Alter My Credit Card Payment Patterns So I Can Pay My Utility Bills?

One of the most important types of credit is often overlooked. Utility credit is essential to most people. Utility credit refers to a person’s accounts for gas, electric and water services. These services are hard to live without, so it is important to handle your utility bill payment and maintain good credit with the companies that provide them.

Having an account with a utility provider is a lot like having any other credit account: You get service now and pay for it later. And, like other creditors, utility companies keep a record of your credit card payment patterns. This record becomes your credit report for utility service. It's important to have a good credit report for utility service, because it becomes part of your entire credit history, which often is a determining factor in your ability to get credit—including utility services—and sometimes even a job, in the future.

How Can I Adjust My Utility Bill Payment So I Can Pay My Utility Bills Easily?

Utility companies frequently require new customers to make a deposit or get a letter of guarantee from a person who agrees to pay the bill if the customer does not. Under the law, requiring only some customers to pay a deposit or get a letter of guarantee is offering them credit on less favorable terms. If done on a discriminatory basis, it is illegal.

The utility company generally can require you to make a deposit or obtain a letter of guarantee if you are a new customer and all new customers are required to pay a deposit, or if you have a bad utility credit history.   If you had a utility account under your spouse's name, and now want the account under your name, you do not have to pay another deposit.

Utility Credit History

What if your spouse had a bad utility credit history? Could that reflect o­n you? In some circumstances, it could.

If your spouse's credit history is bad, the utility company could consider that credit history yours and ask you to pay a deposit or get a letter of guarantee. However, the ECOA gives consumers the opportunity to prove that their spouse's bad credit history does not reflect their own unwillingness or inability to pay.

For example, if you were seeking utility services in your own name but your bad credit history reflects your former spouse's credit practices, not yours, the utility company would have to consider any evidence you provide that you were not part of your former spouse's bad credit practices. That might include information demonstrating that you did not live with the spouse when the account was overdue, that you never saw the bills, or that you paid the bills o­nce you discovered they were overdue.

However, your spouse's utility credit history can be considered yours if your spouse lived with you or you benefited from using the account. If you live in a community property state, the utility company can consider any information about your spouse that it can consider about you when determining your credit history - even if you were not living together and did not share the account while it was open. To learn whether you live in a community property state, check with your state consumer protection agency.

If you cannot convince the utility company that the bad credit history is not yours, you may have to pay a deposit or get a letter of guarantee. Or, you may be asked to pay your spouse's old debts before your service is connected. In the latter case, the company's right to take such action is governed by state law, not the ECOA. Contact your city or county consumer protection office for more information.

What To Do If You Are Denied Credit

If you are denied utility credit (or any credit), you have the right to know the reasons for the company's rejection.   If your application is denied, or if you reject the company's offer of less favorable terms, the company must send you a notice stating either the specific reasons for the action or stating your right to get the reasons within 30 days (if you make your request within 60 days of the company's notice to you). Always put your request in writing.

Learning the reason for the companies denial of credit, may help you to correct your credit mistakes, find inaccuracies o­n your credit report, or expose discrimination in the companies credit-granting process.