How to report a customer credit bureau for not paying?
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An organization that gathers and analyzes consumer credit data and sells it to lenders for a fee so they can decide whether to extend credit or make loans is known as a credit bureau, also known as a consumer credit reporting service agency in the United States. However, can small business report nonpayment to credit agencies? Let’s explore.
How do Credit Bureaus work?
Credit bureaus collaborate with various lenders and credit issuers to assist in consumer credit reporting and loan decision-making. Their main objective is to ensure lenders get the data they require to make lending choices. Banks, mortgage lenders, credit card businesses, and other personal financial lending firms are typical clients for credit bureaus.
Credit bureaus conduct consumer credit reporting and synthesize information about a person's credit score and provide it to lending organizations; they are not in charge of selecting whether or not to grant credit to an individual. Customers of credit agencies can also be consumers, and both groups get the same service—information about their credit history.
How do self-report to Credit Bureaus?
A company must first meet the requirements to become a data furnisher before it may report to the credit bureaus. Depending on the credit bureau, the company might require a minimum number of customer accounts to become a data furnisher. TransUnion, for instance, demands that a company have at least 100 client accounts. For a local credit union, for example, to become a data furnisher with TransUnion, at least 100 of its customers must have credit accounts.
The Fair Credit Reporting Act's minimal requirements, which include regular data uploads and compliance with specific technical specifications, must also be met to become a data furnisher. The company must also sign up as a paying client with one of the three major credit agencies.
Can small business report non-payment to credit agencies?
As a small business owner, it is must to receive payment for the goods or services your company sell. When a debtor fails to pay, it can get very challenging for a business to meet financial need, such as paying employees, buying office supplies, or keeping the business running. You may also choose to hire a collection agency to handle unpaid debt. Further, non-payment of debt can be reported to a credit reporting bureau.
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Consumer Credit Reporting Service
The three major consumer credit bureaus, Experian, TransUnion, and Equifax, gather information about consumer credit and create credit reports. The credit data they use is provided by creditors. Businesses are not legally required to report consumer credit information to credit agencies, but they may choose to do so for all three bureaus, or just one or two.
In order for a company to alert credit bureaus of consumer credit information, such as non-payment of a bill, the company must first become a subscriber with each bureau. For example, the company must subscribe to Experian's credit reporting services before the bureau can add the creditor's accounts to its database. Keep in mind that subscribing to these services is not free and that all federal laws governing consumer reporting, such as the Fair Credit Reporting Act, must be followed by the company.
If you are a small business owner who wants to report to a credit bureau, contact each bureau separately and speak with a representative from the business sales department. They can help you decide which bureau's services would be most appropriate for your business and evaluate the financial benefits of subscribing to them.
For instance, electronic data exchange between the company and the credit agency is used to complete credit reporting. An small firm would not want to go through the process of setting up and maintaining such EDT technology and its supporting software needs for each credit agency if they only want to report one delinquent account.
Business Credit Bureaus:
A small business owner can report an outstanding consumer debt to a consumer credit bureau, but credit bureaus like Dun & Bradstreet and Experian also maintain records of business credit. These reports include information about the company's credit accounts, outstanding debt, payment history, and any other debt collection actions taken against the company, such as lawsuits. To report overdue debt from another company and be aware of debt collection efforts, small business owners must subscribe to a credit bureau's business credit reporting services.
Concluding, can small business report nonpayment to credit agencies? The answer is yes.
Although each credit bureau has its rules, generally speaking, you should only report the major debt that has been past due for at least 90 days. Although Equifax would accept complaints of debts as low as $50, you should be cautious before reporting accounts so small. Often, the time spent reporting the delinquency is more valuable than the money you receive. If you decide to report an overdue account, get detailed reporting instructions from each credit bureau by getting in touch with them.
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