No, this doesn’t happen all the time. They do the credit check up front at the time of application and then let you know that ACCEPTANCE of a contract requires a security deposit. That gives the applicant the chance to accept or decline.
Many will do a soft hit credit check. I’ve had a perfect credit score for years and so don’t want a hard hit inquiry dropping it by 10-15 points and so make sure they sware by a blood oath that it is a soft hit. It’s possible that they did a hard hit after starting service and something came up differently and lower.
Xcel Energy in Colorado did.