Why did I fail energy company’s credit check?

Dear James,

I have recently moved into a property with pre-payment meters. I wanted to change over to credit meters like my old flat. However, after a credit check they have informed me I cannot change over as I failed my credit check. I am really confused as I don't owe any money, never have, and  even took out my first credit card last year to help build my credit history up as before this I never had anything on credit. My credit card is paid in full every month. Could you advise me on this as my gas company has referred me to this site?

Debbie, Kilmarnock

Dear Debbie,

Let me put you in the picture. Some energy providers run credit checks on new customers to help them understand your financial situation and responsibly manage your account with them. They are likely to approach this in a similar way to regular lenders, assessing information from your application form and from your credit report to estimate the likelihood you’ll keep up any agreed repayments. And like other lenders, the chances are that the energy provider has used credit scoring to turn your information into a credit rating. From what you say it appears that the credit rating they calculated for you fell short of their pass-mark, guiding them to refuse you a credit meter. But it’s also possible they found something specific they weren’t happy with, such as an unpaid debt you’ve forgotten about. As with any type of credit refusal you initially have two lines of enquiry open to you.

You should obtain a copy of your credit report that was used as part of the decision, so in this case your Experian report, and you should press the provider to give you any additional information they can to explain their decision. Only they can tell you this because only they know. It’s certainly not something they share with us, which is why you won’t see the actual decision recorded on your report, just the credit check. They might of course tell you that there was no one specific issue and your application failed simply because your overall score was too low. Whether or not there is a particular problem with it, it’s still sensible to review your credit report carefully, checking to make sure everything is accurate and up to date. If you find anything you disagree with or need help understanding just let us know. Using advice on this website you might also identify steps you can take to improve your Experian Credit Score, which may help you get a higher credit rating and hopefully sail through future credit checks. (January 2014, updated April 2018)


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