Taking loans, bearing the debts and then repayment of the same debt is something really difficult sometimes. Usually people forget to analyze their own repayment capacity and financial abilities due to which, unrealistic goals are set by such people and eventually they get hurt because of heavy debt burden. As a result of the above mentioned it is advised to keep in view some permanent black marks which may ruin the overall image of a person’s credit history.
Credit reports: In countries like Australia, UK and USA they update credit report of each individual (who is a taxpayer and possesses a TIN or SSN). As a consequence of late debt repayments people get credit ratings by the collection agencies (just like company get credit ratings) even the relevant bank also provides the credit feedbacks regarding the culprits (defaulter clients). In the long run these people cannot manage to get a loan ever. It’s like a permanent report which keeps on going until the person dies or change the country. Visit this link https://www.eccreditcontrol.com.au/products-and-services/credit-reporting/ for more info on credit reporting.
Collector calls: in case of abnormal delays in debt repayments, financial institutions hire debt collection agencies to handle the cases thoroughly. Since the agencies are paid heavily for the recovery job, debt collectors pressurize the debtor for the repayment. Yes! There are certain rules and laws for the recovery treatment but, still there are certain agencies which never follow such laws and regulations (and to handle such agencies become very tough for the debtor). Negative publicity, negative media exposure and unbearable mental stress are some common gifts by collection agencies. Constant calling is even worse than credit reports as it mentally hurts the debtor.
Unfavorable rates: since the financial institutions get feedback from almost every collector agencies they get to know easily about the bad credit image of a person. So much so in Australia they have made an online portal where they have consolidated all the details and date regarding debtors (those who have defaulted or bankrupt companies) after searching the names of that portal they decide the offering interest rates. So fellas! If you are planning to ditch them for the debt repayment; think again because after this you may not be able to get favorable and flexible interest rates ever in that country.
Job hunting: Debts are considered an important aspect in a businessperson’s life but, salaried persons are also not far from this danger. In this expensive era things are beyond reach of a common person, they take loans and in case of a default (for a salaried person) getting a suitable job becomes the toughest activity of life. In reality they usually fire the defaulter because of poor commitment abilities. Shady images are totally unwanted in reputable companies.
There are so many other repercussions which cannot be imagined and understood. The above mentioned are considered on a lighter note but, lawsuits and names blocked in the exit control lists are some really ‘must not haves’ for a person.