Yes, credit bureaus will be notified when you enter into debt review. Here’s a breakdown of how the process typically works.
Updating your Status with the Credit Bureaus
Once you decide to go under debt review and your application is accepted by a debt counsellor, credit bureaus are notified of your decision. Your credit profile will then be updated to reflect that you are under debt review. This is an essential step, as it protects you from further legal actions from creditors.
Impact on your Credit Profile
Your profile being marked as under debt review signals to potential creditors that you are working on managing your debts. While under debt review, access to new credit or loans will be restricted, helping ensure that your debt does not escalate further.
Completion of Debt Review
Upon successful completion of the debt review process, a clearance certificate (Form 19) will be issued by the debt counsellor. Credit bureaus will be informed, and the debt review status will be removed from your credit profile, allowing you to regain normal access to credit facilities.
Key Takeaways
- Communication: Regular updates are communicated to credit bureaus to maintain the accuracy of your credit profile.
- Protection: The notification to credit bureaus helps safeguard your interests, facilitating the smooth execution of the debt review process.
- Restoration: Once your debts are settled or reduced to manageable levels, steps will be undertaken to restore your credit profile to good standing.
In essence, notification to credit bureaus is a fundamental aspect of the debt review process, pivotal for its effective implementation, and essential for your financial recovery.