|
Utility Credit
Of all the
many different types of credit - for
example, retail credit, loans, charge cards,
and mortgages - utility credit may be the
one that most people cannot do without.
Utility credit is the credit extended to
users of gas, electricity, and water
services. Phone
service also can be considered a utility.
Having an
account with a utility provider is a lot
like having any other credit account: You
get service now and pay for it later. And,
like other creditors, utility companies keep
a record of your payment patterns. This
record becomes your utility credit history.
It's important to have a good utility credit
history because it becomes part of your
entire credit history, which often is a
determining factor in your ability to get
credit - including utility services - and
sometimes even a job, in the future.
To ensure
fairness, federal law prohibits utility and
other companies from engaging in
discriminatory practices. Specifically,
under the Equal Credit Opportunity Act (ECOA),
these companies cannot discriminate against
consumers on the basis of sex, marital
status, race, national origin, religion, or
age. They also cannot discriminate against
people who receive public assistance.
Here's a look
at how the law works when it comes to
utility services:
Deposits
Utility
companies frequently require new customers
to make a deposit or get a letter of
guarantee from a person who agrees to pay
the bill if the customer does not. Under the
law, requiring only some customers to pay a
deposit or get a letter of guarantee is
offering them credit on less favorable
terms. If done on a discriminatory basis, it
is illegal.
The utility
company generally can require you to make a
deposit or obtain a letter of guarantee if
you are a new customer and all new customers
are required to pay a deposit, or if you
have a bad utility credit history.
The utility
company cannot require you to pay a deposit
because any previous utility services you
received were under your spouse's name and
not yours. If you can show that you had
utility service in a spouse's name, the
utility company must consider the utility
credit history yours. If you share your
spouse's utility credit history, it could be
unlawful for the utility company to require
you - but not your spouse - to pay a
deposit.
Determining
Your Credit History
What if your
spouse had a bad utility credit history?
Could that reflect on you? In some
circumstances, it could.
If your
spouse's credit history is bad, the utility
company could consider that credit history
yours and ask you to pay a deposit or get a
letter of guarantee. However, the ECOA gives
consumers the opportunity to prove that
their spouse's bad credit history does not
reflect their own unwillingness or inability
to pay.
For example,
if you were seeking utility services in your
own name but your bad credit history
reflects your former spouse's credit
practices, not yours, the utility company
would have to consider any evidence you
provide that you were not part of your
former spouse's bad credit practices. That
might include information demonstrating that
you did not live with the spouse when the
account was overdue, that you never saw the
bills, or that you paid the bills once you
discovered they were overdue.
However, your
spouse's utility credit history can be
considered yours if your spouse lived with
you or you benefited from using the account.
If you live in a community property state,
the utility company can consider any
information about your spouse that it can
consider about you when determining your
credit history - even if you were not living
together and did not share the account while
it was open. To learn whether you live in a
community property state, check with your
state consumer protection agency.
If you cannot
convince the utility company that the bad
credit history is not yours, you may have to
pay a deposit or get a letter of guarantee.
Or, you may be asked to pay your spouse's
old debts before your service is connected.
In the latter case, the company's right to
take such action is governed by state law,
not the ECOA. Contact your city or county
consumer protection office for more
information.
Get It In
Writing
If you are
denied utility credit (or any credit) or
offered less favorable credit terms than you
applied for and you reject the offer, you
have the right to know the reasons for the
company's action. If your application is
denied, or if you reject the company's offer
of less favorable terms, the company must
send you a notice stating either the
specific reasons for the action or stating
your right to get the reasons within 30 days
(if you make your request within 60 days of
the company's notice to you). Always put
your request in writing.
Learning the
reason may help you become more
creditworthy, correct errors, or detect
unlawful discrimination.
For More
Information
|
