Past Due Electricity Bill? Will That Affect Your Credit?

by Garrett Faden

Maintaining a good credit score is crucial for various financial endeavors, from securing loans to renting apartments. However, there's often confusion about how certain bills, like electricity payments, impact one's credit score. To put it simply, in Texas, missing one electricity bill payment will not hurt your credit score (as long as you pay it in a timely manner). Let's delve into why this is the case, Retail Electricity Provider (REP) policies, and what precautions you should take to safeguard your financial standing.

So You Missed Your Bill's Due Date. What Now?

The Impact of Missing Payments

According to Energy Ogre’s Director of Automated Operations, Jane Lobo, “Missing a single payment with an electric provider will not have an immediate impact because electricity providers don't report the bill until it becomes severely delinquent.”

So, missing one electricity bill payment will not affect your credit score, as it might with other bills, such as credit card payments or loans. As long as the bill is paid within a few days, your credit score is unharmed, but you may be hit with some late fees by your REP.

But what if you miss more than one payment?

Reporting Policies

While many electricity providers will let you get away with one late payment every once in a while, if it becomes a habit, then they have the right to report your shaky payment history to credit bureaus. Now, remember, this is all up to the REP. Some may be more lenient than others. Make it a habit to pay all bills, including electricity, on time. Timely payments reflect positively on your credit report and demonstrate financial responsibility.

Collection Agencies

If your invoice remains outstanding for around thirty to ninety days, your REP will forward it to a collections agency. Regardless of the nature of the debt, engaging with collection agencies can notably reduce your credit rating. Even settling the debt won't prevent the negative impact on your credit score once a collections agency is involved. Additionally, it can take at least one year before the record of this event could be removed from your credit history.

Jane would also like to remind Texas electricity consumers that “REPs are legally required to notify a customer before they send the bill to collections. If the REP fails to abide by that rule, it’s the customer's responsibility to report that behavior.” Or, if you’re an Energy Ogre member, we can assist you in trying to determine if proper notification attempts were made. Energy Ogre is not only here to get you a low rate; we’re here to make sure everyone plays by the rules too!

Other Options

If you're facing financial difficulties and anticipate difficulty paying your electricity bill, communicate with your provider. Many companies offer flexible payment plans or assistance programs for customers experiencing financial hardship. And Energy Ogre is always glad to help you ask your REP what payment assistance they offer for their customer base.

The bottom line is that, while one missed electricity bill in Texas won't immediately affect your credit, repeated late payments could. But if you miss several, your REP may report late payments to credit bureaus, impacting your credit score. The real problems lie if you have delinquent bills sent to collections. Those can severely harm your credit, sometimes taking years to disappear from your credit report. Lastly, communication with your provider is crucial, as they may offer assistance programs. Stay informed and address financial challenges promptly to protect your credit.