The credit granter – the company that you opened the account with – sends their account details every month to the credit bureaus. All your purchases and payments are recorded. If you have a business, all those records of your accounts also go to the credit bureaus. If you miss even one payment or are a few days late with your payment, it is recorded at the credit bureau. In this way other credit granters can see if your credit history is good or bad, if you are a good or poor credit risk. The better your credit history, the better the chance of you getting a loan for a house or car at a favourable rate.
Each credit granter has different rules for deciding if you are a bad payer and should be reported. But once you are reported it goes onto your credit history and stays there for some time. If you consistently cannot pay, the credit granter may take you to court to get his money back and then you are considered to be ‘listed’ as this judgement is clearly listed on your records at the credit bureaus. The credit bureaus are merely the places where all the data is kept; the original creditor – clothing store, bank, etc – is the ‘lister’. So while there is no such thing as a ‘black list’ – your credit history and rating will show that you have defaulted in some way, impacting your ability to gain access to additional credit.