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Is a Bad Debt Too Big or Too Small?

November 21, 2016

Is a Bad Debt Too Big or Too Small?

November 21, 2016

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Is a bad debt too big or too small?

Every bad debt amount is important because each one reflects the character and reputation of the consumer and is important to the business’s financial affairs. A single large bad debt can significantly impact the going concern of a business.  On the other hand, a few small bad debts may not.

But what about consumers owing big or small bad debts?

Clearly a large bad debt will usually result in creditors not granting credit or seeking help from professionals to collect the debt. Small debts owed by consumers may depend.  One small bad debt simply may be an oversight by the consumer. On the other hand, if a consumer owes multiple small bad debts this may signal financial trouble or a consumer who just does not care to pay creditors.

At CINCB, we frequently see both scenarios of overextended consumers and consumers who simply exploit the system and businesses for their benefit. These consumers typically owe multiple creditors.

If you knew that your customer owed multiple businesses small debts, would you offer them credit?

With one click, existing members can list more debt with CINCB right now.

Have questions? Call us today to speak with one of our experienced and professional agent for debt collection and credit reporting services.

 

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