Bad debt is usually a product of the debtor going into bankruptcy or where the additional cost of pursuing the debt is more than the amount the creditor could collect. This debt, once considered to be bad, will be written off by the company as an expense.

Your credit report will include a detailed account of information related to your overall debt. It will show any delays that you have made with payments along with any notes that you may have added to explain why payments were late.

For example, you may have run up a large debt on your mail order catalogue because you were the victim of identity theft or perhaps you were charged for items that you have previously returned.

If you have no valid excuse for late or missed payments, this will result in a negative light on your record.