Can a Past Due Energy Bill Affect Your Credit Score?

Utility bills are one of the most dangerous recurring expenses for your credit rating, because the best-case scenario is that they have a neutral effect on your credit rating. You can probably prevent an unpaid energy bill from affecting your credit, but you must act fast, because the utility company will become less amenable to negotiations as the days pass.

Identification

A past due energy bill will most likely affect your credit score if the utility company decides it cannot collect on the account and sends it to a collection agency -- which might be a department in the company itself -- or sues you. A lawsuit becomes part of the public record, so the national credit reporting bureaus should pick it up and collection agencies usually report directly to the bureaus, according to Maxine Sweet of Experian.

Exception

Some energy companies can and do report to the national credit bureaus, but they are the exception not the rule. Most states prevent utility companies from sharing private customer data, so the bureaus cannot pick up utility data in these states even if they wanted to do so. If your utility company reports to the major credit bureaus, any past due bill affects your credit score by as much as 110 points.

Effects

All collection accounts and judgments stay on your report for seven years plus six months after the creditor writes off the debt. A single collection account or judgment can take 100 points or more off of your credit rating, according to Les Christie of CNN. This can take you from an excellent rating -- usually a 760 or above on the FICO scale -- to an average score of 660.

Considerations

Don't just ignore the bill because things can only get worse. Instead, talk to the energy company about getting an extension on your bill's due date. At the very least make a partial payment, which might be enough to prevent the company from turning off your service. If you have long-term problems affording utilities, you might receive government help, such as financial assistance from the Low Income Home Energy Assistance Program (LIHEAP).