/ Home & Energy, Money

Water bills spill over into credit reports

A dripping kitchen tap

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?

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?

Comments
Member

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.

Member

I agree 100%.

Member

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.

Member
headache56 says:
25 February 2013

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.

Member

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.

Member

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!

Member
richard says:
26 February 2013

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.

Member

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

Member

“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!