![Pinterest](https://pinterest.com/pin/create/button/?url=https://uknews.evprotec.com/energy-bill-warning-as-switching-supplier-could-hit-credit-scores/&media=https://uknews.evprotec.com/wp-content/uploads/2022/11/generic-energy-usage-statement-766076488-1.jpg&description=HOUSEHOLDS are being warned that their credit scores could take a hit if they're looking to switch energy suppliers. Energy companies typically carry out credit checks on customers looking to switch over to them. Households have been warned over suppliers making hard credit checks on incoming customersCredit: Getty This is so they can check if you're in a position to pay your bills before accepting you as a new customer. It's used as a way to protect them from the risk of picking up the bill for customers missing payments. There are two kinds of credit checks - hard ones leave footprints on your file, while soft ones don't. Hard checks can damage your score - lenders could view a lot of marks with concern, and may even turn down your application for credit. But as many households are being clobbered by a cost of living crisis and falling behind on bills, experts have warned that those looking to switch could see their credit scores take a further hit. Hargreaves Lansdown senior personal finance analyst Sarah Coles said: "A hard credit check will affect your credit score, and make it more difficult to borrow, which adds insult to injury for struggling households." She warned households against making a switch if they are looking to get on the property ladder soon. "It may also make it more difficult to qualify for a mortgage if you have lots of recent hard checks," she said. "Rising house prices and mortgage rates have already made getting a mortgage difficult enough, so if you are considering remortgaging, it may well be worth switching energy company until after you have secured a deal." While AJ Bell's head of personal finance Laura Suter said households need to beware of making "lots of applications to different providers in a short space of time". This is because it could be seen as a "red flag" to lenders. Which energy providers do hard credit checks? The Sun asked the major energy suppliers what their policy was on performing hard credit checks on customers. E){kind=link}
HOUSEHOLDS are being warned that their credit scores could take a hit if they’re looking to switch energy suppliers.
Energy companies typically carry out credit checks on customers looking to switch over to them.
This is so they can check if you’re in a position to pay your bills before accepting you as a new customer.
It’s used as a way to protect them from the risk of picking up the bill for customers missing payments.
There are two kinds of credit checks – hard ones leave footprints on your file, while soft ones don’t.