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Reporting bad debts to credit bureaus Obviously, credit bureaus have a close relationship with creditors. The credit bureaus depend on the reports given by creditors in order to build a credit profile of an individual. At the same time, the creditors depend on the credit reports from credit bureaus to determine the creditworthiness of a potential borrower. A person with bad debts is immediately reported to the credit bureau and such a person will find it very challenging to obtain approval for subsequent loan applications. However, the consumers are protected by the FCRA or the Fair Credit Reporting Act. Individuals can obtain a copy of their credit reports and dispute any inaccurate information in it. For Equifax, the number to call to report fraud is 800-525-6285; for Experian, the number is 888-397-3742; and for TransUnion, the number is 800-680-7289. Bad debts do not mean the total destruction of an individual’s finances. There are many ways to recover and to start again. It is also a relief to know that records of bad debt stay in the credit report for a maximum of seven years, court records of bankruptcy stay for ten years, and inquiries are kept only for two years. |