Understanding the Debt Review Process: Are Credit Bureaus Automatically Notified

Yes, credit bureaus will be notified when you enter into debt review. Here’s a breakdown of how the process typically works:

1. Notification to Credit Bureaus:

• Initial Notification: Once you decide to go under debt review and your application is accepted by a debt counselor, credit bureaus are notified of your decision.
• Status Update: Your credit profile will 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.

2. Impact on Your Credit Profile:

• Credit Status: Being under debt review will be marked on your credit profile, signaling to potential creditors that you are working on managing your debts.
• Access to New Credit: While under debt review, access to new credit or loans will be restricted, helping ensure that your debt does not escalate further.

3. Completion of Debt Review:

• Clearance Certificate: Upon successful completion of the debt review process, a clearance certificate (Form 19) will be issued by the debt counselor.
• Notification to Credit Bureaus: 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 your financial recovery.