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Service credit is an arrangement between a utility and a customer in which the utility delivers a service—gas or oil, electricity, water, or sewer service to name a few—in exchange for a monthly payment by the borrower. The payment may be payment in full for services delivered in that month, or they may be a fixed budget amount with a “catch-up” payment made at the end of the term. Service credit isn't reported to the credit bureaus unless you miss payments or the debt is sold to collections. If the customer has overpaid during the course of the term, which is usually a 12-month cycle, the service provider refunds the overpayment to the customer. Most service creditors now require customers submit to a credit check before granting credit privileges.