After signing the lease and booking the movers, you also have to change your address and set up your utilities to your new home and put down a utility deposit.
When you create a new account with utility companies — think electricity, gas, water and TV/internet — you may have to pay a deposit upfront. As with security and pet deposits, utility deposits help insure against losses that result from unpaid or underpaid bills.
Often, if you rent a house or in a multi-unit building, you may not need to create utility accounts as they’re included in the rent and continue to be in the landlord’s name. But if you’re required to open your utility accounts, here’s how to approach it and tap into savings.
Applying for utility services
Once you’ve signed your lease, you should start applying for your water, electricity and gas service. Depending on the service, you can apply online or in-person.
If you’re a new customer to a utility company and you’re not transferring an account, the utility company may require you to put down a utility deposit or a letter of guarantee as a safeguard in the case of non-payment.
The deposit, if applicable, will depend on your payment history as listed on your credit history.
How much is the deposit for utilities?
Unfortunately, there’s no real framework for the amount of a utility deposit. It will depend on the company and its requirements. It can range from less than a hundred dollars to several hundred depending on your credit history.
Luckily, utility deposits are refundable. If you pay your utility bills in full, you should expect to receive your entire deposit, plus interest, back after a set number of payments or when the agreement ends. The deposit usually isn’t more than two payments, but it will depend on the company.
Utility companies can require you to pay a utility deposit if you’ve received three or more delinquency notices. They can also have your service disconnected for not paying and need it to reconnect or if a prior customer who owes a balance lives at that address along with you.
Your credit score matters
Many don’t know that your utility payment history is actually part of your overall credit score. Yes, the credit score that allows you to rent an apartment, buy a car and eventually, buy a house.
The utility company will pull your credit history, including your record of paying for utilities at any previous residences or your overall payment history. Paying your utility bills on time is essential.
For example, if you’re trying to open a water utility account, they’ll look at your payment history and require you to pay a water deposit upfront to protect themselves from non-payment.
Pay your utility bill on time
To get back your utility deposit, paying on time is critical. However, if you miss payments or do not make payments on time, the deposit will be applied toward the discrepancy.
Depending on your state, utility companies can require you to pay a security deposit after several collection notices and disconnect your service.
If strapped for money, contact your utility company and let them know that you’re currently having a difficult time paying and if they could put you on a payment plan.
Also, when trying to lower your bill, you can also look at your usage. Little changes can amount to significant savings, so start with these five changes:
- Look up how to reduce your energy, water or gas consumption on their website based on your current setup and appliances
- Join one of their budget billing plans to pay a flat fee and make the payment more predictable for your budget
- Wash your clothes on cold, adjust your thermostat and turn your water heater down to less than 120 degrees to reduce energy and gas consumption, if accessible
- Replace all of your bulbs with LED bulbs, they’re surprisingly affordable now and last up to 10 years
- If you work from home, make sure you wait until the night to run the dishwasher or use the washer and dryer since energy is cheaper during off-peak times
What if you’re denied utility service?
If you apply for utility service and the utility company denies you, you have the legal right to know why. The company is required to send you a letter stating the specific reasons or sharing how to get a more detailed explanation from them within 30 days.
If your utility bills were previously under your spouse’s name, but not yours, the utility company should allow you to submit your paperwork and give you a chance under your account.
In this case, if you have good credit and you didn’t live with them when they were overdue, you should be able to get utility service under your name, according to the Federal Trade Commission.
Keep an eye for utility overcharges
Check your bill amounts every month to keep an eye for overcharges or any opportunity to reduce your bill. If you see any discrepancies, reach out to the utility company to ensure it gets addressed and a refund is made.
Sometimes it may be triggered by a broken water meter in your complex or neighborhood, or perhaps a refund is due for an extended power outage.
Keep track of your utility deposits
Along with your apartment security deposit, it’s essential to keep track of any utility deposits. List them in a spreadsheet, if needed, along with the amount you paid.
This way, the next time you move, you can collect all of your deposits without issue and not have to worry about it. The best way to get back your utility deposit is to continue taking care of your credit score and pay on time.
