Light Company With No Deposit
As we continue to wait out the COVID19 pandemic under the stay-at-home orders, our electric usage and bills will likely go up. This might be an excellent opportunity to switch electric suppliers and lock-in a cheaper electric rate for the next few months. However, some electric companies might require you to pay a deposit, when you sign up. This article explores how to secure electric service, without having to give up hundreds of dollars for a deposit.
When Do You Need To Pay A Deposit?
When you are switching your electric suppliers, you might be asked to pay a deposit by an electricity company. As with rent deposits, it is the electricity company’s way to insure against losses that result from unpaid or underpaid bills.
However, in some cases, the electricity supplier waives the deposit payment or offers plans that require no deposit at all. These cases usually are:
- You have a good credit score (minimum of 580-600) with one of the big credit score companies (Experian, Equifax or Transunion)
- You are switching to a prepaid electricity plan – which means that you will be paying for your electricity service as-you-go
If you have a credit score that doesn’t meet the above standard, don’t worry. You certainly aren’t alone. Approximately 1 in 4 Americans have a credit score below 600 points, preventing them to fully take advantage of the available electric choice. Not many of us can afford to pay several hundred dollars for the electricity service deposit and yet we all need access to electricity.
That’s why we looked into the ways to avoid paying a deposit for an electricity plan and we are ready to provide you will all the information you need about how to lock in a great electricity plan without paying extras.
How To Avoid Paying A Deposit For Energy Service?
If you want to sign up for a fixed electric rate contract, there is a high chance that the electric company will run a credit check on you to determine whether you require a deposit payment or not. This is regulated by the Public Utility Commission of your state – who mandates what are the credit and deposit limit requirements in your state.
Texas electricity customers cannot be asked to pay a deposit that exceeds the equivalent of one-sixth of the estimated annual billing. The deposit should be refunded automatically if you have paid your electric bills for 12 consecutive months without being disconnected for nonpayment and your bill payment wasn’t late on more than two occasions. However, a deposit amount equal to two months of the energy bill is still a lot of money for most people.
However, there are ways that you can avoid paying a deposit when signing up for an electricity plan:
- You have been a customer of another electricity supplier in the past two years, with no outstanding balance and no late payment on more than two instances during the last two months
- Customers 65 years of age and older in good standing with their current providers.
- Victims of family violence.
The other alternative is to sign up for a prepaid electricity plan, with no deposit, no credit check required.
What Are No Deposit Electric Plans?
To avoid paying a hefty deposit dor your new electricity plan, you can choose a supplier with prepaid electricity options that do not require a deposit or a credit check. How does prepaid electricity work?
Instead of paying your electric bill for the previous month’s usage, with prepaid electricity, you pay upfront – topping it up as you go. The main advantage of prepaid electric service is flexibility – they don’t require security deposits or credit checks and there is no contract – you are free to switch anytime.
Suppliers with prepaid electricity very often offer same day service too – meaning that you will get connected immidiately.
Suppliers With No Deposit Electricity Plans
Interested to find no deposit electricity plans? We can help.
We review all major electricity providers, many of whom offer prepaid, no deposit no credit check electricity plans. All you need to do is to enter your zip code on our website to find an energy plan with no deposit. You can also read our reviews of Texas electricity suppliers with prepaid electricity plans, such as Smart Prepaid Electric.
Other suppliers, including Champion Energy, Reliant Energy, Infinite Energy, and Direct Energy offer Deposit Alternative programs, that will allow you to pay the deposit in installments to soften the financial impact.
What Are The Pros and Cons Of No Deposit Plans?
Keeping the light on without paying a deposit sounds great, but it’s important for you to understand both pros and cons of a prepaid electric plan. Let’s quickly look at the pros:
…and what about the downsides?
If you think that the benefits of a no deposit plan outweigh the cost, enter your zip code to shop for offers directly on our website.
Below are answers to some of the questions you might have about a no deposit electricity plan.
Why do electric companies require a deposit?
When you sign up for a new energy plan, the supplier will run a credit check on you, and in case of bad credit (below 600 points), you might be asked for a deposit. As with rent deposits, it is the electricity company’s way to insure against losses that result from unpaid or underpaid bills.
How can I avoid paying a deposit for my electric plan?
There are certain scenarios when the electric company waives the deposit requirement in the case of not meeting the credit check criteria.
You have been a customer of another electricity supplier in the past two years, with no outstanding balance and no late payment on more than two instances during the last two months
You are 65 years of age and older in good standing with their current providers.
You are a victim of family violence.
Are there no deposit electricity plans?
Many energy suppliers offer no credit check, no deposit electricity plans, called prepaid electricity plans. Instead of paying your electric bill for the previous month’s usage, with prepaid electricity, you pay upfront – topping it up as you go. Enter your zip code to shop for no deposit electricity plans in your area.