The Risks and Rewards of Credit Reporting

The Risks and Rewards of Credit Reporting

Recently, the Canadian Broadcasting Corporation (CBC) did a news article surrounding erroneous credit reporting and the effects on Canadian consumers. And while this article primarily deals with individual consumers, corporations are affected as well. Click HERE to view the article.

A credit bureau is a centralized database where creditors and other data furnishers share information about a consumers credit history and payment habits. Authorized members can access your personal credit file for reasons such as debt collections, or other permissible purposes.

An individual or company’s credit score can go up (good) or down (bad), depending on factors such as making payments on time, level of debt outstanding, use of credit, and whether or not you have any judgement or collections against you. Your credit score determines if you qualify for credit, and if so, what interest rate you will pay.

Low risk = low interest  Higher risk = higher interest.

The premise of CBC news article is that credit reports containing errors are costing Canadians millions of dollars in unwarranted high interest rates.

Priority Credit Recovery is considered a data furnisher as we report collection claims to Equifax, Trans Union, DNB Canada, and Lumbermens. While it is our client’s responsibility to ensure the debts assigned for collection are legitimate debts, we do not always obtain the information necessary to report our client’s claims to credit bureaus.

At a minimum we require: name of debtor, complete address, amount outstanding, and the date of delinquency.

Reporting collection claims to the credit bureaus is an excellent collection tool; however it can be a huge waste of time and resources for your collection service provider if your data contains errors.

Bottom line – if you want to avoid being named in a future news articles or government consumer investigations, make sure you work with your collection service provider to ensure they are receiving all the data they need.