Reporting Utility Payments Is Better Than a Customer Suffering From a Delinquency
Late payments can also ding a credit report, but it doesn’t damage a credit report nearly as much as a collection. Late payments affect credit scores, but how much impact a late payment has on a score depends greatly on a person’s current credit score. An excellent credit score can plunge as much as 50 to 100 points with a late payment. The effect is less, but just as devastating, if a customer already has a low credit score. Regardless of good, fair or poor scores, customers can benefit greatly by making regular payments. Also, it is far better to have a late payment than having an account go to collection.
It Is in a Utility Company’s Best Interest to Make Regular Reports
Utility companies lose money at the end of the day when accounts go to collections. This is because a third part collection agency may not pay for the full amount the account actually owed. This puts utility companies in a precarious predicament. Unlike other companies, according to grist.org, utility companies must charge fair rates. This means they have to keep a healthy amount of customers without their accounts going to collection. They can’t simply charge higher rates to recuperate what has been lost.
Companies Who Report Are Subject to the Fair Credit Reporting Act
Every company that reports information to a credit reporting agency is subject to the Fair Credit Reporting Act, which means they must accurately report information and must have a familiarity with reporting. However, this requires either hiring more staff or keeping on current staff and paying overtime to accommodate the extra work. If a customer challenges a report, the utility company has to perform a thorough investigation. Any errors will need to be corrected immediately.
Utility Companies Can’t Afford In-House Payment Reporting
The problem for many companies is that any extra work, apart from the main goal, creates issues with profits. While utility companies do not typically have a lot of competition to render services, failure to keep up profits can be catastrophic. Depending upon the utility company, it’s important to keep as many customers as possible to avoid charging other customers higher rates and suffering the consequences from a public utility commission – Investopedia.com. It’s simply not possible or feasible to take on additional tasks that place a company at a loss.
How to Report Utility Payments: A Third Party Reporting Company
Utility companies can greatly benefit from hiring a third-party utility payment reporting company. It’s not necessary to know how to report utility payments when help is available. A third-party reporting company can accurately report on-time and late utility payments, provide thorough investigations, avoid and help to prevent accounts from going to collections, maintain profits, and a third-party utility payment reporting company is already familiar with all laws and regulations needed for reporting, which helps to protect utility companies from problems down the road from issues and the necessity of training staff on all applicable laws and regulations. At the end of the day, it makes sense to use the services offered by a payment reporting company.
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