News & Resources

What to do about your credit when a storm hits

Feb 18, 2013 Walt Wojciechowski

After a natural disaster hits, individuals might lose power and have to either go elsewhere for a certain length of time to have access to electricity or simply wait for it to be restored. But when bills come in, some people then choose not to make payments, because they didn't have access to certain services, such as internet and television.

However, if they are under the impression they don't have to pay for the services they didn't receive without discussing it first with their provider, credit scores may be affected. This is because many have chosen to rely on a Payment Reporting Builds Credit (PRBC) score to qualify for loans they would not have customarily been approved for.

Those with poor or nonexistent credit can provide credit bureaus with records of positive payments to utilities companies and use that information to build a positive score.

But what should they do when they didn't receive the services they were paying for? Reuters reported that many people experienced this when Hurricane Sandy hit the East Coast. Around 8 million people lost power, and some are under the impression that they don't have to pay for services they couldn't access during this time. While a lot of the time, the source said, providers don't charge during the post-storm clean up, if individuals don't ask and the provider does require payment, their credit score could be adversely affected.