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A New Reason for a Good Credit Score

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    A New Reason for a Good Credit Score

    FYI - I discovered today a new way in which good credit saves you money: utility deposits!

    We are moving to a new place the end of this month, so I am busy trying to get all the ancillary items lined up: phone, water, gas, etc. And so, I contacted the electric company. Sure, they would be more than happy to set me up. However, they need $800 to do so! I could swear I heard it wrong, but it was correct.

    Basically, they calculate what they CLAIM to be a 2-month average bill for the property we are moving to (and rounded up apparently) and use that as a deposit. If you can go 23 consecutive months with good payments, they will allow you to use the deposit toward the 24th month, and refund the balance. Until that time, they will happily make good use of your money.

    However, if you spend some extended time on the phone with an agent and get them to perform a (hard) credit check on you, then when everything checks out on you, they will waive the deposit.

    Glad I have outstanding credit!

    #2
    Some insurance companies base their rates on your credit score, so that is something to keep in mind as well.
    Brian

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      #3
      Hmmm...I've never been asked to make a security deposit with a utility company before. Holding onto the deposit for 2 years seem rather excessive too. What city do you live in? I'm just curious.
      Rock climber, ultrarunner, and credit expert at Creditnet.com

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        #4
        Originally posted by bjl584 View Post
        Some insurance companies base their rates on your credit score, so that is something to keep in mind as well.
        Yeah, this is something to keep in mind too. As most often they base it on your credit score.

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          #5
          Good find! Hopefully that type of credit check won't actually damage your credit, but it usually doesn't.

          Comment


            #6
            Wow, I've never heard of that before, but it's definitely a good reason to have good credit!

            Comment


              #7
              Originally posted by fe2o3ez View Post
              FYI - I discovered today a new way in which good credit saves you money: utility deposits!

              We are moving to a new place the end of this month, so I am busy trying to get all the ancillary items lined up: phone, water, gas, etc. And so, I contacted the electric company. Sure, they would be more than happy to set me up. However, they need $800 to do so! I could swear I heard it wrong, but it was correct.

              Basically, they calculate what they CLAIM to be a 2-month average bill for the property we are moving to (and rounded up apparently) and use that as a deposit. If you can go 23 consecutive months with good payments, they will allow you to use the deposit toward the 24th month, and refund the balance. Until that time, they will happily make good use of your money.

              However, if you spend some extended time on the phone with an agent and get them to perform a (hard) credit check on you, then when everything checks out on you, they will waive the deposit.

              Glad I have outstanding credit!
              Wow this is great advice! Thanks! It's surprising how there are many ways to bring down your payments by having a good credit scores. Companies are always look for people to do this so they can have reliable customers.

              Comment


                #8
                I realize this is a pretty old thread but I just wanted to shed some light on the deposit issue with utility companies. I used to work in the call center for a large utility company outside of Chicago (Rhymes with Lie-Poor ). Anyways, when a new customer would call to start service we would run a soft credit check on them. Then the computer would say whether or not they needed a deposit to start new service. The main reason, in my opinion, that this is done is because you would not believe the amount of people that try to scam utility companies when their service is shut off. All it takes is a phone call to the company from a 'stranger'-- who in reality is probably a significant other, cousin, sister, son, etc.-- saying that you are moving into the property and that you need the utility to be transferred in to your name. If the service is completely shut off at the property, this is a common way that people get it turned back on. I also dealt with a lot of people trying to use their INFANT CHILDREN'S social security numbers to start service (the computer would flag this too.) There were also a lot of college kids just starting out at their first apartment finding out that they had a bad debt with the utility in their name (sometimes thousands of dollars) because one of their parents had opened an account using their information. It's pretty sad, really.

                Requiring a credit check/deposit is just another way for the company to cover their butt if someone doesn't pay them.

                Comment


                  #9
                  Originally posted by lkaps84 View Post
                  The main reason, in my opinion, that this is done is because you would not believe the amount of people that try to scam utility companies when their service is shut off. All it takes is a phone call to the company from a 'stranger'-- who in reality is probably a significant other, cousin, sister, son, etc.-- saying that you are moving into the property and that you need the utility to be transferred in to your name. If the service is completely shut off at the property, this is a common way that people get it turned back on.
                  Do you ask for lease agreements before you switch the utilities? Our utility companies here do.

                  Comment


                    #10
                    Wow, that is a huge amount for a utility deposit. I hope they at least give you interest on it for the 2 years.

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