Householders hoping to shift their bills to a cheaper energy supplier should check their credit file before they apply, if they have previously struggled with debt, as those with bad records can be prevented from paying by direct debit and getting the best possible prices. The push by energy firms to move customers onto monthly direct debit payments in recent years has seen a substantial gap emerge between this method and other payments. Those who pay for energy through direct debit payment methods pay £1,162 on average per year compared to those on quarterly bills and pre-payment meters, who face higher average bills of £1,314.

This has effectively turned energy bills into a form of credit. And with people with bad credit files being stopped from paying for energy by via direct debit, they end up facing much higher gas and electricity bills. This means that those with the worst credit scores - typically the more financially unstable - are being stopped from accessing the cheapest prices.Another complaint is that those unhappy with the idea of direct debits, such as the elderly, are also locked out of a full choice of the cheapest deals.

Energy firms insist that some customers are on pre-payment meters because it helps them to manage their debt and energy usage - but they could be forking out £150 more annually than those who pay via other methods, according to research by Aqua credit cards. But while potential customers may be credit checked for energy, the bar is set much lower to get onto direct debit payments than it is when being checked for financial products such as credit cards or loans....Read more here