Overdue Library Books Can Hurt Your Credit Score!
by Tiffany Sanders

As municipal governments increase efforts to collect unpaid parking tickets, dog-catcher fines, library fines and the like, some consumers are seeing a surprising impact—a radical drop in their credit scores which could advertly enter you into the reals of a bad credit risk

To each individual consumer, the fines in question may be very small and collection actions may seem petty and unnecessary. For many cities, however, these unpaid fines and fees add up to millions of dollars a year. Those dollars can be collected with little investment by the cities if they’re turned over to private collection agencies.

Private agencies typically charge a percentage of the balance actually collected, so there’s no risk to the government. The risk to consumers who don’t make those payments in a timely manner, however, is significant. That’s because collection agencies report delinquencies to the three major credit reporting agencies. A single collection item can drop your credit score as much as 100 points. Many consumers don’t know that charges like this can affect their credit.

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