Do you have a bad credit score? So, according to you, what does bad credit affects? Is your answer- your credit card or when you are taking a mortgage? Well, you must know that poor credit also affects your eligibility for taking top energy deals. Wondering how? Most of the companies provide energy tariff if the customer passes the credit score. But there is nothing to worry if you have a poor rating. This article will make you aware of how you can manage a decent energy plan with bad credit.
A numerical value that represents a person’s credit worthiness based on payment history is a credit score. It generally varies from 0 to 1200. The greater the number, the higher is the credit score. Equifax score is the standard measurement system. It works on a five-point system: below average is from 0-509, average ranges from 510-621, good for 622-725, very good to score 736-832, and excellent credit score is 833 -1200.
Experian and Dun and Bradstreet are the other agencies that record credit score.
Why energy suppliers check credit?
As credit card companies check your worthiness to see whether you can pay bills on time, in the same manner, energy companies do. They analyze the risk with a credit check.
What credit information do suppliers check?
Credit agencies make a risk assessment profile based on some of the following information:
- credit liability
- repayment history
- past credit
- credit infringement
All this information is used to create a credit score that energy retailers use to calculate eligibility.
How to prove your worthiness with bad credit?
You are aware now how your credit score is checked. So let’s see now the different ways that help you manage a good plan from the company with no deposit electricity plan or prepaid plan despite the bad score.
- Pay Deposit
Unless there is a huge outstanding amount, the company doesn’t reject you. The only requirement is to pay a small deposit like $50 or pay an average of a few months of the electricity bill in advance. You need to pay the deposit before getting the services.
- Pay As You Go
Mobile companies provide you with the facility to pay upfront for the facility that you are going to use. In the same manner, you need to look for companies that offer this facility. The benefit of this service is that you don’t need any deposits. Just make a starting payment and regularly monitor your usage. If required, you can pay the necessary amount later. This is the best option for persons with bad credit.
- Prove Reliability
At times, companies reject you based on your spouse’s credit score. Here you need to prove that you can pay the bills on time. Usually, electric companies provide you 30 days to prove your worth. For example, you are separated from your spouse. You can prove that you were not aware of overdue bills, and the moment it came to your notice, you immediately paid them. Or you have cleared all the bills, but still, your old company showed a balance. You can provide them with the receipts showing that you don’t owe any balance.
Though you can get energy plans with the bad score, still you need to improve your credit score. To do so you can:
- pay bills and rent on time
- reduce the limit of your credit card
- on time loan payment
- consolidate debts
- clear credit card bill every month
Follow the methods mentioned in the article to get electricity even on bad credit and make efforts to improve your credit score.