Texas Electricity Deposits and Credit Scores
|FICO Credit Score Range||Credit Score Type||Deposit Amount Required|
|Less than 629||Poor||$200-$400|
(*Scores are Estimated)
Texas electricity providers require a credit check in order for you to obtain service. A social security number is required. Most often they will use a “TEC” score. The TEC (Telecommunications, Energy, and Cable) Score is based on a risk model developed specifically for telecomm and energy accounts. The basic idea is that your score is different for Electricity and Internet / TV service vs. Autos, Homes and Credit Card payments. The assumption is that people would rather pay their light company, rather than make a credit card payment if they are in a bind, and should not be penalized for poor credit card payments, when they paid their utility bills on time.
There are 4 Types of scores used in the Texas electricity market to measure utility and credit payment risk
- FICO Score
- TEC Score
- Vantage Score
- Exchange Risk Score
Your FICO score is theFair Issac Corporationrating of your credit risk. It is based on your payment history for products that are reported back to credit rating agencies. FICO Scores range from 300-850.
The TEC Scoreis a specific model provided by Experian. Not all Electricity Providers use Experian as their credit scoring provider. Transunion uses a “Vantage Score” and Equifax uses an “Exchange Risk Score“, and some Texas electricity companies use the traditional FICO score.
Texas Electricity Service Deposits:
- Based on your credit score, your electricity service deposit may range from $100 to $400 or more (depending on your estimated annual usage)
- Texas has specific consumer protections and requirements set by the PUC.
- The total of all deposits shall not exceed an amount equivalent to one-sixth of the estimated annual billing
- Texas PUCT Deposit Rules
Lack of Credit History Data:
The largest issue in credit scoring is the lack of historical data. Many times utilities do not provide payment histories to credit reporting agencies. So while you may have a 600+ FICO score, you may have a 400 Utility Score and have to pay a deposit. Many Texas Electricity Companies provide alternative ways to show previous utility credit. Most often this will be a letter from your previous electricity provider stating that your account has been in good standing.
No Deposit Electricity Plans
A number of companies provide no-deposit electricity plans in Texas. Pre-paid electricity plans allow customers to deposit $25 and "pay as you go." Much like pre-paid cellular service. Customers deposit money and receive email and text alerts when their account gets below a certain level. Generally, the pre-paid electricity company has a mobile phone app to help custoers manage their plan. Customers will pay a slightly higher rate for the service, but these can be offset with a number of sign-up promotions and discounts.