We Energies stops reporting to credit bureaus, impacting some customers' credit scores
MILWAUKEE -- A recent decision by a major utility company is having unintended consequences for some customers.
Lynn Crump is an aspiring business woman who recently found her credit score dropped.
"With all three reports, an average of 21 points," Crump said. "I'm trying to, you know, maintain my good credit standing."
The reason for the credit score drop is not Crump's fault.
Lynn Crump
"We Energies was a trade line on my credit report and it's no longer here," she explained.
In late December, We Energies stopped reporting customer payments histories to credit bureaus. Since then, Contact 6 has heard from three people claiming their credit scores have gone down.
"If I would have been in a position to buy a home or apply for credit or anything, that would have been a shock to me, not knowing that this was removed," Crump said.
Brendan Conway, We Energies' spokesman, said the decision brings their company in line with other Wisconsin utilities that no longer report to credit bureaus.
"We were actually an outlier, so most utilities in this country don't," Conway said. "We don't control how this impacts your FICO score, right? So whether we're reporting or not reporting, we're not sure how those credit agencies handle that."
Contact 6 reached out to all three credit bureaus — Equifax, Experian and TransUnion. TransUnion was the only company to respond.
TransUnion said in a written statement:
“Utility bills are considered a form of alternative data, and we support reporting this information as this has demonstrated potential to help more people gain access to the credit economy. Reporting is optional and some utilities choose to only report negative data such as missed payments, rather than positive payment histories, which could have a positive impact on a consumer’s credit score. TransUnion supports full-file reporting, which includes positive and negative data, because this is in the best interest of consumers. If people are paying their bills on time, it should count towards their creditworthiness.
When a data furnisher stops reporting, that means they can no longer send us updates or corrections to the data they previously furnished to us. As a result, TransUnion must purge data that will become stale if it’s not regularly updated. For example, an account that shows an outstanding balance or even a single late payment will grow stale and could potentially be inaccurate if the company that reported it is unable to update or provide a correction. Unfortunately, some consumers could see a negative impact based on the loss of an active account.
Credit scores are statistical predictors of creditworthiness. Importantly, there is no single credit score for a consumer. Different models are used depending on the lender and credit product. As a general matter, models create a score based on factors such as the number of credit accounts, the amount of available credit used by a consumer, the consumer’s account payment history, and other information as permitted by law.
Consumers can focus on improving their credit score by making on-time payments. It is also encouraged that consumers check their credit report regularly to ensure the information is accurate. Everyone is entitled to one free credit report from each of the three credit reporting agencies per year via AnnualCreditReport.com. You can also use a credit monitoring service in order to be notified if there is a change in their credit file. Many financial institutions offer free monitoring or credit reports to their customers, and TransUnion also offers a free service called TrueIdentity. Using TrueIdentity, you can review and lock your credit file and receive alerts in real-time if someone is trying to access your credit information – even if the file is locked or frozen.”
Crump said We Energies should have given customers a heads up.
"I faithfully pay them every month," she said. "Should have put an insert into consumers' utility bills back start in September or October to notify us that this change was coming so we could have prepared ourselves."
We Energies said in the past some customers complained their payment histories were being sent to bureaus. The utility doesn't think this is a widespread problem, saying it has only received a couple of complaints.
Customers can request a 15-month summary of their payments to offer the credit agencies. TransUnion does not allow this kind of self-reporting. According to Experian's website, it does.