Answered: What does ‘in debit’ mean on your energy bill?

If you have an energy bill that says you’re ‘in debit’ or that there’s a ‘debit’ on your account, it means you owe your energy supplier. But why use that term? Unfortunately, energy suppliers use loads of overly-complicated terms on their statements.

Here, we’ll explain in more detail what it means to be in debit, how it happens, and what you need to do if your energy balance is in debit. Let’s jump right in!

Why am I in debit on my energy bill?

As we mentioned, being in debit means you owe your energy provider. But how does that happen? If you use a prepayment meter, you’ll be spending a set amount on energy each month. As temperatures grow colder, you’ll probably use more energy to heat your home, and you might use more energy than you’ve paid for. Alternatively, if you haven’t submitted meter readings, your provider may be undercharging you.

How does my debit get paid?

In most cases, you’ll be paying your energy bill via direct debit. If you owe money on your energy bill, your supplier will simply adjust your direct debit to account for the outstanding balance. In many cases, they’ll do this over a period of time so you don’t see a huge increase.

For example, say you’ve been paying £150 a month for your energy. Then, your supplier finds that you’ve been using £180 of energy a month for the past three months, so you are £90 in debit. They might adjust your rate to £210 (£180 + £30) for the next three months to cover your arrears instead of debiting £270 (£180 + £90) to cover your entire balance at once.

How do I know when I’ll be charged for my energy?

Energy suppliers are obligated to inform you if your payments are going to increase. In most cases, you’ll have at least 10 working days’ notice if a payment increase is coming your way. This way, you can double-check that your current account has the funds to cover your upcoming payment.

How to avoid being in debit on your energy bill

You might not be able to completely avoid being in debit, as your energy usage changes throughout the year. To keep your energy costs as predictable and your bills as accurate as possible, submit regular meter readings to your energy supplier. This way, they’ll be charging you accurately and you won’t end up with a debit for unpaid usage.

What does in credit mean on my energy bill?

Being in credit is the opposite of being in debit, so your energy provider owes you money. Just as it’s common to end up in debit heading into the winter months, you may end up in credit as the spring and summer months approach.

Do I need to do anything if I’m in credit on my energy bill?

No, you don’t need to do anything if you’re in credit. You can request a refund, which your supplier is obligated to issue, but in most cases it’s best to just leave the credit on your account for a later date (like when autumn and cooler weather approaches again).

Does being in debit on energy bills impact your credit score?

Being in debit on your energy bills typically doesn’t impact your credit score. This is because energy bills can only be charged after you use the energy. This can lead to discrepancies if you paid in advance or if you didn’t submit a meter reading. Being in debit is a common part of the energy billing cycle, and it usually self-corrects over time. Your additional usage in winter is negated by your lowered use in summer.

However, just because being in debit usually doesn’t impact your credit score doesn’t mean it can’t. For example, if your energy supplier increases your payment and your bank doesn’t have the money to cover it, the payment might fail. This can lead to a missed payment, which does impact your credit score. In fact, your payment history is the most important factor influencing your credit score, so missing an energy payment altogether can seriously hurt your score.

If you receive a notice that your energy payments will be increasing, pop into your bank account to make sure you have the funds to cover it.

Protect your credit score with Pave

If you’re in debit on your energy bill, don’t panic. It will usually work out over time, and your energy supplier is obligated to let you know when your payments will increase.

If you’re expecting a payment increase, it can be reassuring to know that your accounts are prepared to handle it. By tracking your account balances and upcoming bills, the Pave can help you prevent missed payments and protect your credit score.

Plus, not only does Pave help protect your score, it can also help you actively build your credit. With a 0% interest credit builder account*, you can build your payment history without taking on any debt.

If you want to protect and build your credit score with ease, get the Pave app today!

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*Credit available subject to approval. Learn more and see Pave’s full terms and conditions here.

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