Water bills spill over into credit reports

by , Money Researcher Money 25 February 2013
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Yorkshire Water has announced it’s started sharing its customers’ payment data with credit reference agency Experian. Could this spell good or bad news for your credit rating?

A dripping kitchen tap

Ultimately, this move from Yorkshire Water means that its customers’ credit records will now show whether they’re up to date with their water bills, or whether they’ve fallen into arrears.

Lenders use your credit record when deciding how much money they’re prepared to lend to you, and at what interest rate. Traditionally, it focused on how much money you owe to banks and other lenders, and how good you are at repaying it.

But increasingly, credit rating agencies are looking at other aspects of financial management too. Yorkshire water isn’t the first utility company to share data with Experian, and within the next few months, Experian will start collecting details of your rental payments. So, if your landlord signs up to the service – your rent payment history could also form part of your credit rating.

Is there such a thing as over-sharing?

There are potential benefits to an increase in data-sharing. After all, if you’re meeting all your financial obligations, it could result in a better credit rating for you.

And for those who have yet to establish a credit history, it could be helpful for payments like rent and utility bills to be taken into account. After all, young people or those who haven’t borrowed money before can find themselves in a bit of a catch-22 situation – a lender won’t lend to them until they can prove how reliable they are at repaying credit.

But equally, if you were to miss some water payments or a gas bill, you could find your rating suffers. This could make it more difficult and expensive to get credit.

Arguably, companies lending you large sums of money are entitled to know how likely you are to pay it back.  But how do you feel about credit reference agencies having access to extra financial information about you? Do you welcome it as an opportunity to demonstrate your credit-worthiness? Or do you think lenders have access to enough information already?

13 comments

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william

I’m surprised this sort of thing hasn’t happened already. No doubt gas/electricity and mobile phone charges will soon be added to the list. And probably a good thing too.

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Laskarina

I agree 100%.

As it happens William, Yorkshire Water isn’t the first company to have done this. British Gas already shares full payment data, and BT, Eon and Scottish Power all share details of defaults and missed payments. Experian says it’s looking to get more utility companies on board too.

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headache56

Another example of the double standards being applied, in this case Data Protection. These are the often the same people who make us jump through excessive hoops, at our expense, before they will even talk to us. It would not surprise me to find the next step ill be them selling details of people in need to Payday loan companies – in return for referral fees.

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Em

Unfortunately the issue isn’t just about sharing financial information …

The Data Protection Register for YORKSHIRE WATER LIMITED [edited for brevity] states:
“Purpose 14 – Trading / Sharing in Personal Information – The sale, hire or exchange of personal information.

Data subjects are: … Customers and clients … Complainants, correspondents and enquirers … Relatives, guardians and associates of the data subject … .

Data classes are: … Family, Lifestyle and Social Circumstances … Education and Training Details … Racial or Ethnic Origin … Political Opinions … Religious or Other Beliefs Of A Similar Nature … Trade Union Membership … Physical or Mental Health or Condition … Sexual Life … Offences (Including Alleged Offences) … Criminal Proceedings, Outcomes And Sentences.

Transfers: … Worldwide”

A number of the Data classes above relate to “sensitive personal data” (a special category of data under the Data Protection Act 1998) which require additional conditions to be met before processing (the term “processing” includes the storage or transfer of such data) to be permissible under the Act. This would usually require the individual whom the sensitive personal data is about to give their explicit consent to such processing.

But I cannot imagine many circumstances where the processing, let alone the sale of such data, would be “necessary” (another requirement of the DPA 1998) in the context of a water supply business. And to even consider transferring such sensitive data worldwide? Given their customer’s lack of choice over alterative suppies of water and sewerage, the company shows an appalling lack of responsibility and their Data Controller should be asked what they think their role is.

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Lee Beaumont

I am with Yorkshire Water & they have totally messed my account up. I always pay over 12 months but on my credit file they have put the year end date as Dec 2012 and not March. I have needed to make a complaint with Yorkshire Water and they are looking into it for me. They also started reporting in June 2012 (8 months ago). I agree with them doing this BUT at least make it 100% correct!

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richard

No wonder so many people get unwanted cold calls – who knows who is using such data for profit. I don’t MY data shared with anyone.

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James Jones Experian

The repayment data that companies share through the credit reference agencies cannot be used to target marketing offers.

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Em

“Cannot” is not the same as may not!

And you mean to say that Experian do not factor this information into their Mosaic consumer classification of individuals, which is definitely intended and used to target marketing offers? Then I’m really disappointed at the poor accuracy of the information you are supplying to my clients!

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Maidens

Whatever happened to the Data Protection act ? Are we not entitled to privacy especially if one pays within the terms of the supplier.
Once again another nail in the ‘individuals’ coffin, talk about sleep walking into 1984, we’re are already there but in amore subtle way.

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RussellR

Certainly those companies which provide our core supplies such as water and energy should share that information. If you have somebody who cannot pay for their basic needs, then their finances are already under stress and any request to enter into any other commitment such as loans or overdrafts – or even other utilities – should be considered with a greater degree of care.

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Nick

The problem I have with this is that my credit score has dropped 100 points.

Since I pay by direct debit, this month I ‘owe’ Yorkshire Water the whole bill less this months DD. For the next 10 months the balance on my Experian credit report will slowly reduce. At the same time my credit rating will slowly creep back to ‘Excellent’. It seems manifestly unfair that my rating is significantly and negatively impacted by my choosing ‘the easiest and simplest’ (YW’s own words) way to pay.

I imagine many thousands of other YW customers will be in the same position!

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logic and fairplay

i got behind with yorks water bill around 18 months ago. called them, called debtlines, stepchange etc. paid what i could afford (no enough) then we got things sorted and they have been getting almost 49 and change off me every month. so im paying my current year on time and ok and no problems along with a small chunk off the old bill. all agreed and ok, no missed payments no letters no worries. ya think . i go on experian and what do i see… do isee a row of greeen for the last year … no do i see a row of green for this year but a row of red or orange or something like an arangement from last years bill….noooo no no, i see an arangement… for the two bills amounts rolled into one, and RED 6 al over every bit of it . a row of red 6 red 6 red 6 .. all looking like i have not paid them a penny since last april …. when you look at the balamce you see its coming down each month yet every month its listed the same RED6 and they wont change it for toffee. folks, pay your water bill, freaze and starve and walk to the food bank, but pay your water bill because they are unfair in the huge negetive impact they have for a little being behind from 18 months ago. they should at least show that i keep to my agreement and they get the money. its grim

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