Credit scores used by Texas utility to determine rates charged to customers

Credit scores will now pay a role in determining the utility rate charged to customers of a Texas utility known as TXU Energy. TXU plans to begin pegging some of its customers' electricity rates to their credit scores, charging them more if they have fallen behind on telephone, power or cable television bills in the past.

The new rate structure, as of Sept. 27, 2004 affected customers outside of North Texas who switched to TXU to save money on their electricity bills. Under the plan, South Texas customers with the best credit histories will be offered an electricity rate 8% lower than the rate offered by the local incumbent utility, an amount known as the price to beat. Fifteen percent of customers will be charged a rate that is 4% better than the price to beat. The 15% with the worst credit histories will be charged the price to beat, meaning they will have saved no money by switching providers. NOTE: ICFE Certified Credit Report Reviewers are trained on credit scores and what steps consumers can take to maintain a good score or how to improve one.