Unpaid Library Fines Can Hurt Your Credit Score!

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
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
While not all municipalities use private collection firms, the
trend is increasing across the country As government collection
activity rises, so does the number of consumers surprised to
discover that they’re paying higher interest rates–or being
turned down altogether–because the kids lost a library book or
they neglected to renew Rover’s license
If such charges are already appearing on your credit report, you
may be able to negotiate their removal in exchange for payment
Getting items removed from your credit report can be a long and
stressful process, though, and there’s no guarantee that you’ll
be successful The best defense is to be aware of the risks and
make sure you pay those parking tickets on time
(C) 2006, Total Bankruptcy, Inc This article may be reproduced
in its entirety without limitation and without notice, except
that any reproduction must include the entire article, which may
not be modified in any way, and must include the author bio
information contained herein, including the URL and, if
published online, a live link to the URL included therein

Tags | actions, catcher, collection, credit, delinquencies, fines, government, municipal, municipalities