Failing to keep up to date with your utility bills can affect your credit score and credit report.
Utility companies will take action over unpaid bills and will share details of your late payments to a collection agency and your debt will be reported to the credit bureaus.
Unpaid debts can also lead to court action in a bid to make people pay. A utility company will push for a legal judgement to be made on outstanding debt so it’s important to be aware of the impact non-payment can have.
It can be easier than you think to fall behind on utility bills and the reasons for falling into arrears may often be simpler than you’d expect.
Common causes of utility bill debt include:
- Direct debits or standing orders based on inaccurate estimates
- Unexpected utility bill price rises
- Unexpectedly high usage, due to prolonged periods of cold weather
- Lost bills or billing errors
- Moving house and forgetting to settle a final bill
- Unexpected expenses that mean you can’t afford to pay your utility bill on time
- Unpaid debts after switching supplier
Debt of any kind can have a debilitating impact on your life but not making utility payments can have an immediate effect on daily life. Below we highlight the impact utility debts could have on your life.
Fees: Falling behind on payments will incur a late payment fee which can add further financial strain, especially if you’re already having issues making payments to several other bills.
Debt collection: You run the risk of your debt being picked up by debt collection agencies who will chase for payment if you fail to pay for a number of months.
Future issues: Failing to keep up with payments can make it harder to make the most of utility services or change utility provider in the future as some companies keep track of a history of payments. It ca make finding a better deal in future more difficult too.
Family life: Knowing that you’re struggling with payments many utilities can understandably have an impact on everyday life and put a strain on relationships with families.
Day-to-day: Debt never takes a day off and naturally has an impact on day-to-day life. For many, it’s the first thing they think about when they open their eyes and the last thing they think of before they fall asleep which can have a negative impact on quality of life.
However, it’s important to know that if you fall behind on utility bill payments you must be provided with information about assistance programs and payment plan options before being disconnected – including discussing the possibility of an equal monthly payment plan.