Become a member of the credit bureaus
The most effective way to report debt is by joining the credit bureaus. These include Equifax, Trans Union and Experian. All of them will have different ratings so it is important to check which suits you before signing up.
You will only be qualified to report debt or become a member if your business caters to a specific amount of debtors. Smaller businesses cannot take advantage of their services, despite the fact that one can report debts as small as $50. Contact the relevant agency and obtain their qualification merit. You will need to fill out certain forms and wait for their approval. A fee will be charged for every report you submit. In return, your request will be looked after on an immediate basis. For a general rule, any payment which has gone unpaid over 90 days is considered as bad debt.
Take help from a collecting agency if you are running a small business. They can offer you ways to recover your bad debts, and work nearly the same way as credit bureaus. Furthermore, some collection agencies are affiliated with credit bureaus and can easily trace or report bad debts. The collection agency will charge a fee or will keep a certain percentage of the bad debt upon recovery. This helps small business owners focus on their work rather than chasing their lost money.
Credit Reporting Service
Credit reporting service companies such as Corporation and Fidelity Information, assist you in reporting bad debts to the three major credit bureaus due to their close affiliation. They will prepare the necessary information on your behalf and provide all necessary help. However, unlike collection agencies, they often don’t help small businesses in the recovery of the money.
File a lawsuit
If you find no other option, file a lawsuit against your debtor. The case catching the public eye will most certainly be brought to the attention of the credit bureaus which then report it as bad debt. However, legal processes take months to settle and will take a sizeable chunk of your earnings.