How can time with Utilities effect the rating when we are encouraged to shop around?

r-u-s-x

It seems perverse that we are encouraged to shop around and move Utilities but being with a company under 6 years negatively effects your rating. Either we encourage competition or stop using it as a solution to all inefficiencies in the market.

[Deleted User]

Changing utilities isn't a concern.

Don't mistake a credit score from someone who doesn't give credit for a solid credit history.

rtho782

Eh, the thing is while the credit score is not really worth much, it is an example of an automated scorecard, such as many credit providers use.

Now, obviously providers can weight different factors however they think best to optimise their profit levels and reduce bad debt, but "age of existing credit accounts" is something that some of them will have at least some weighting to, and, you can see from experian's example, this can include utilities.

So I can see it being possible that switching utility providers regularly would hurt your application chances over staying with the same one for say 10 years, which they will see as "more stable".

I guess apart from anything else if you don't change energy providers ever you're unlikely to shop around for a new credit card when the offers run out so are likely a more profitable customer!

Chappaz

It will impact your file, but not by much I don't think.

Whilst lenders use credit files partly to get an idea of whether you're a "suitable customer", it's mostly about the assessment of risk.

So things like on-time payments, no overuse of credit and no late payments/defaults/CCJs are all a lot more important.

If they see shorter, less stable accounts, what they'll be more interested in is whether any black marks (i.e. missed payments or defaults) resulted out of them. If they see it's an amicable split (i.e. you paid everything you owed on time to close the account), it's going to be less of a concern.

There is a limit to this though, of course. If there's a history of you repeatedly switching accounts every few months to chase better deals, they may take a dim view of that.

GingerBob_3

There is a simple answer to this problem: don't allow utility companies to report customer accounts to the CRAs. They can't be trusted to get it right anyway, so it's best if they can't do it.

callistris

GingerBob wrote: »

There is a simple answer to this problem: don't allow utility companies to report customer accounts to the CRAs. They can't be trusted to get it right anyway, so it's best if they can't do it.

How do you suggest we stop them?

I had an account with Thames water, I moved to a different area not supplied by Thames, and closed the account.
Four months after closing, I see Thames have reported my closed account on my credit files.

Arleen

callistris wrote: »

How do you suggest we stop them?

I had an account with Thames water, I moved to a different area not supplied by Thames, and closed the account.
Four months after closing, I see Thames have reported my closed account on my credit files.

By getting a pre-paid meter. No credit, no problem. Besides the massive hassle and missing out on the positive of having utilities on your file.

GingerBob_3

callistris wrote: »

How do you suggest we stop them?

I had an account with Thames water, I moved to a different area not supplied by Thames, and closed the account.
Four months after closing, I see Thames have reported my closed account on my credit files.

As individuals we can't. Lobbying your MP on the matter is maybe a way forward. Incidentally, did you know that you didn't give Thames Water consent to report your account to the CRAs?

sargeantsalt

The utility companies had to get special permission from the ICO to use CRAs because they are not consumer credit. There was never a need for utilities to have access to credit files. Any utility can apply for authorisation with the FCA to make consumer credit loans just like a bank. The utilities can make a credit agreement in accordance with the rules set out in the Consumer Credit Act and the customer can apply for a loan to pay for their energy/water. The CCA gives rights and protections to borrowers. The utilities are arguing utilities are 'credit' but are avoiding having to follow consumer credit laws. I think utilities should not be allowed to share data with CRAs unless they are providing CCA regulated credit to their customers. That way, those customers who want a credit record can can take out a 'gas loan' and those customers who pay their bills by the due date can opt out. Do write to your MP with my suggestion. It gives everyone a choice and improves consumer rights as well as letting utilities legitimately share data.

PixelPound

Same with mobiles, my old O2 shows on under closed but Tesco Mobile doesn't report to them.