More than 22% of individuals have had a telecom debt on their credit report in the past five years, according to a report released by the Bureau of Consumer Financial Protection. Accordingly, telecom debt accounted for more than one-fifth of all collection agency revenue, according to the report. Of those furnishers that reported telecom debt to a credit reporting agency, 95% of them were either collection agencies or debt buyers.
The BCFP analyzed more than 5 million credit reports over the past five years to assess the impact of the collection of telecom debt on individuals.
Once individuals have a telecom debt on their credit report, they are likely to have it appear more than once. More than 65% of individuals who had a telecom tradeline on their credit report in the past five years had at least one other telecom debt on their credit report as well. This could be the result of a debt being sold to a different buyer and reported again, the report noted.
The report noted there were 202 distinct furnishers reporting telecom debt during the five-year period, however the top furnishers account for the majority of tradelines. The top three furnishers accounted for 48% of all telecom debt reported to a credit bureau, and the top five accounted for 60%, according to the report.
Individuals with subprime credit scores were 12 times more likely to have a telecom debt on their credit report than an individual with a prime credit score. For medical debt, by comparison, the ratio is about the same.
As well, having a telecom debt on a credit report was indicative of other troubles, as well. More than 60% of those who had a telecom debt on their credit report had some other form of debt in collection as well.
