Every single month I get an expense from Georgia Power, Georgia Natural Gas, Dekalb County Water, Comcast, and AT&T.
And while many of you probably do not live in Georgia, my guess is you’ve a similar list of utility responsibilities that you need to pay on a monthly basis.
Utilities are a kind of credit, indicating some type of service is provided ahead of time with expectation of repayment being made at the end of some kind of invoicing cycle?
If utilities are “credit”, then why are not utility accounts typically reported to the credit reporting firms?
Traditionally speaking, many utility service providers have kept away from credit reporting.
There’s nothing legally that avoids energy suppliers from reporting to credit reporting agencies, so it’s actually a matter of choice.
Having said that, reporting details to credit reporting agencies does not come without risk.
The minute an utility company (or other business) shows anything to a credit reporting firm they become obliged under the Fair Credit Reporting Act.
First off, they’re required to carry out examinations if and when a consumer challenges what they are reported.
Second, they’re needed to employ affordable procedures guaranteeing the optimum possible precision of exactly what they are showing.
Third, they are required to correct info that’s discovered to be incorrect.
The Credit Gain access to and Inclusion Act
Oddly enough, an expense was introduced in your home of Representatives in June of this year that’d enable the reporting of utility and home leasing info to credit reporting agencies.
The Credit Access and Addition Act would change the Fair Credit Reporting Act such that absolutely nothing in Act can be translated as restricting the reporting of energies and rental commitments.
I refer to it “odd” since there’s absolutely nothing in the existing version of the Fair Credit Reporting Act avoiding the reporting of lease or utilities to credit bureaus.
Still, even if the Credit Access and Inclusion Act were to be passed it wouldn’t mean even more utility companies would begin reporting to credit reporting agencies.
The law mightn’t just avoid them from reporting, however would not require them to show. So, it would still be optional.
No Need to Report to the Credit Bureaus
There are three generally acknowledged forms of credit: installment, revolving, and open.
Installment is “fixed payment for fixed duration time”, like a home mortgage loan or a car loan.
Revolving is like a charge card where you can consume to some amount (credit line) and your month-to-month repayment varies based upon your balance.
Open credit requires repayment completely each month, like a charge card or an energy repayment.
When you stop making your automobile loan payments, your vehicle gets repossessed. When you stop making your charge card repayments, your charge card gets closed down.
When you stop making your power, gas, Internet, water, cable television or phone payments, those services get shut off.
You might argue that utility companies don’t need to show anything to credit bureaus due to the fact that the danger of losing their services is considerable.
If You Default It Will Wind up On Your Credit Reports Anyway
Even if your utility company does not report monthly task to credit bureaus it does not mean you are in the clear.
If you were to default on any of the previously mentioned obligations, not just will your water and power be switched off however providers will certainly turn over the account to a 3rd party debt collection agency who’ll then report the account to credit reporting firms.