Can I Get an Electricity Plan Without a Credit Check?

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What is a credit check or credit rating?

Why do you need a credit check when signing up for electricity?

Do all electricity providers do credit checks?

Are there any electricity retailers that don’t do credit checks?

What happens if I fail the credit check?

Will I need to pay more if I have bad credit?

Power your home without worries with iSelect

Long story short

Credit checks show your reliability with payments

Energy retailers use credit ratings to gauge how reliably you’ve paid past bills. Your rating will range from 0 to 1,200, with higher scores showing a better ranking.

Most energy providers require a check for new customers

If you’re moving homes or changing plans but sticking with the same provider, you won’t need to do another check, but if you’re new, you’ll likely need one.

Bad credit won’t mean no power in your home

You might have fewer options with a lower credit rating, but designated retailers in your postcode still need to supply your home with power.

What is a credit check or credit rating?

Think of your credit rating as your financial check-in. It’s a quick snapshot of how you’ve handled credit and repayments in the past. Energy retailers use them to see the level of risk you could pose to them, and how responsible you are financially.

Your credit rating considers your financial history – like your repayments, when you pay bills, how long you’ve had credit, and other financial details – then rolls it all into a score between zero and 1,200. Generally, the higher the score, the more reliable you appear. Here’s a rough range from Equifax (a leading Australian credit reporting agencies) to see how your number might translate into ranking:

• Good: 661-734
• Very good: 735-852
• Excellent: 853-1,200

Why do you need a credit check when signing up for electricity?

Credit checks are a quick and reliable way for banks and lenders to see how likely it is for someone to pay them back. The same is true for credit checks before signing up for a new electricity and gas plan.

When you’re signing up for a new plan, a credit check helps your retailer understand how likely you are to pay electricity bills on time and keep up with ongoing fees especially if your plan includes lock-in contracts with ongoing or conditional fees, like late or exit fees. You’ll likely only be asked to get a credit check if you’re a new customer to the provider. If you’re moving house or have changed your plan details (like moving over to a renewable energy plan), but are sticking with the same provider, you may not need to do one.

Your final credit score can affect your ability to sign up with a certain energy provider, but you should always have options, even if they’re more limited.

Do all electricity providers do credit checks?

Most energy providers will ask new customers to complete a credit check before signing them up. For some, the information from your credit check is needed to meet legal and regulatory requirements.

Are there any electricity retailers that don’t do credit checks?

There might be a small list of energy providers in Australia that don’t need a credit check for new customers, but they’re not very common. For most energy retailers, a credit check is a safeguard that helps them understand a customer’s financial behaviour and lets them know if a customer may be experiencing hardship, which they have to offer support for when identified.

Helpful tip

While paying your power bill on time won’t necessarily boost your credit score, doing the opposite might affect your rating. If you have a debt of more than $150 that’s overdue by 60 days or longer, your energy provider can report it to a credit reporting agency as a default (overdue debt), which can be a negative factor.

If you’re struggling to pay an upcoming bill, make sure to call up your provider early to organise a payment plan or extension.

Julia Paszka

General Manager – Utilities & Credit Cards

What happens if I fail the credit check?

Even with a low credit score, you’ll still be able to find an energy retailer to power your home. Bad credit might make it harder to find the retailer of your choice, but it won’t leave you with zero options.

In saying that, an energy provider doesn’t have to offer you access to their services, whether it’s a market offer or basic plan, if you refuse to complete a credit check or if your credit history is poor. There are rules in place to make sure people in these situations can find an energy provider.

If you’re considered high-risk, the most recent provider at your property before you moved in (or took over the bills) may still accept your application as a residential customer. There are also designated energy providers for different postcodes who must accept applications from customers in those areas, regardless of their credit rating. This means that if you aren’t able to sign up for a market offer you could still sign up for a standing offer with your default provider.

Your new energy retailer may offer you payment plan options or hardship assistance to make sure you can pay for your energy use. They should also check to make sure you’re eligible for any rebates to help lighten the load on your bills.

Will I need to pay more if I have bad credit?

A lower credit score might affect how easily you can find and sign up with a new provider, but it shouldn’t send your energy bills through the roof. While on a market plan, providers can tweak your energy prices or energy rates when needed, the actual unit price of your energy per kWh can’t change based on your credit score alone. So, you don’t have to worry about lowering your energy usage to be able to pay your energy bills.

Power your home without worries with iSelect

Signing up for energy in your home shouldn’t feel like a quiz you haven’t studied for. Whether your credit score is spotless or a little rough around the edges, there are still energy options out there for your home. If you want to find a plan that meets your needs and situation, comparing all your options is a good place to start. With iSelect, we can help you compare a range of providers in one place. You can also call our energy comparison experts at 1800 664 532 to turn the lights on and the stress off.