Octopus and my Credit Score

born_again

Your score means nothing & is never seen by any lender. CRA love to suck people into believing it's super important. In the end it is a pointless number.👍

Summerof26

https://forums.moneysavingexpert.com/discussion/comment/82100500#Comment_82100500

I could not find anything in my communications, I used to be Co-op Energy which joined with Octopus several years back. I got a smart meter with Octopus that is why:

Octopus Energy requires customers to maintain an active monthly direct debit to access most smart tariffs, including Octoplus (which I have), as well as to participate in flexible payment options. Smart meters enable the supplier to collect half-hourly readings automatically, which facilitates variable direct debits where customers pay the full bill amount shortly after each statement is issued, rather than a fixed monthly estimate.

In principle, I have no issues with it, but that they are writing a short-term debt into credit reports for a pending payment per DD terms they have set is outrageous. I have no outstanding and my balance in my account is 0.

MWT

https://forums.moneysavingexpert.com/discussion/comment/82101168#Comment_82101168

Firstly, the impact of this is not what you seem to think it is, any more than having your last credit card balance show on your report. The amount owing is real, you have opted to receive a bill and then pay it 10 days later.

There is no problem with this though, whatever caused your card decline it wasn't just paying by variable direct debit.

Secondly if you don't want to pay by variable direct debit then don't. Phone up and ask to move onto a normal DD plan which will aim to have you pay the same amount each month.

Personally I wouldn't change anything and stay on the variable direct debit, but if you prefer to see a zero balance on your Octopus credit file report then that should do it.

molerat

I pay my energy by VDD and it appears as a balance on my credit report. My score did not drop when this arrangement began and I was accepted for an Amazon Barclaycard (as well as Lloyds and Santander credit cards !). There was likely something else in your report that caused the rejection.

kingstreet

https://forums.moneysavingexpert.com/discussion/comment/82100225#Comment_82100225

Can you clarify for us - when you say "there is nothing else in my history" are you saying you have no properly maintained credit commitments to score positive points? A non-history can often be as bad as one with negatives.

There is/was a "999 and declined" thread on here where those with the (old) maximum Experian score were talking about being declined for some credit. This really demonstrated the unreliability of such things. They are indicative at best and misleading at worst.

Summerof26

https://forums.moneysavingexpert.com/discussion/comment/82102046#Comment_82102046

I have no missed payment history. The only balance is from Octopus.

I got a credit card but use it very little. I do not have loans. I do not like to buy something and pay it off over time. May be that is why, but then again it really isn't actually wrong!

But Octopus setting up terms of payment that show up in the credit report is not right. May be I got unlucky with the timing and by the next update of my credit report the Octopus balance will disappear but even that is wrong. It shouldn't cause. I am still waiting to hear back from Octopus.

QrizB

But Octopus setting up terms of payment that show up in the credit report is not right.

You do have a credit account with Octopus, though. You're not on prepayment. That's a fact.

I got a credit card but use it very little. I do not have loans. I do not like to buy something and pay it off over time. May be that is why, but then again it really isn't actually wrong!

^ That could be why Barclaycard don't want you as a customer; you don't have much of a history of regular credit use (beyond your Octopus account), and the credit card you've already got isn't being used.

If you don't like credit, why are you applying for the Amazon Barclaycard? Is it just for the joining bonus? Because that might be what Barclaycard are thinking.

(I've applied for a Barclaycard three or four times in the past decade and they always turn me down. It's nothing personal, I just don't fit their target for customers.)

MWT

https://forums.moneysavingexpert.com/discussion/comment/82102140#Comment_82102140

But Octopus setting up terms of payment that show up in the credit
report is not right. May be I got unlucky with the timing and by the
next update of my credit report the Octopus balance will disappear but
even that is wrong. It shouldn't cause. I am still waiting to hear back
from Octopus.

You are still not getting the point.

Having a credit account show on your report and show as being paid regularly is a good thing when you are seeking further credit.

If you already have a very underused credit card then you are probably not going to get another one as there is little sign that you are going to provide the company with any worthwhile revenue…

kingstreet

https://forums.moneysavingexpert.com/discussion/comment/82102140#Comment_82102140

If you're concerned about your credit score, use your credit card regularly. Buy with it things you would have purchased anyway and repay in full once the statement has been issued. You'll also benefit from S75 protection and interest on the money you would have spent for the days between spending and repayment.

Frankly, I think you're looking in the wrong direction at an energy account issue. On my ClearScore dashboard energy isn't mentioned as a high, medium or low impact factor. The only thing that does impact (medium) appears to be the credit card utilisation for my one low-limit card.

MWT

https://forums.moneysavingexpert.com/discussion/comment/82102852#Comment_82102852

Exactly, demonstrating responsible use of credit is far more helpful than having it and never using it, then trying to get more.

As each of our kids headed off to Uni they were encouraged to set up a credit card and use it instead of a debit card for the things they needed but always without fail pay it off in full each month.

None have had issues since then and good habits like that tend to stick over time.

Having things like a balance on an energy account have no negative impact as long as the payments stay recorded as on time. Same goes for the balance that will show on the credit cards, it is just a normal aspect of getting something before it is paid for, the balance is not a problem, it is the payment history that is important.