Everyone knows you can damage your credit score if you miss a credit card or mortgage payment. But what about a late library book or unpaid traffic ticket? There are plenty of organizations that can and do report to credit reporting agencies or turn to collection agencies to make sure they get their money.
Before you think about ignoring a fine or letting a bill slide, read on to find out what organizations and service providers can affect your credit score:
Most private landlords and even apartment complexes don’t report to national credit bureaus because they are not issuing credit. More often than not, they’ll simply give you an eviction notice and keep your deposit if you’re late on rent.
Sometimes, however, a landlord or property management company will attempt to collect their back rent by turning you into a collection agency. According to the Fair Credit Reporting Act, you must be notified if you are being turned into collections. After that you have thirty days to dispute the debt or pay it before it shows up on your report.
Services provided by your city, such as water or trash collection, often take action against those who fall behind on their city utility payments. Like landlords, some cities will turn to collection agencies to get past due amounts rather than write it off as a loss.
Sometimes, you could get sent to a collection agency without even knowing it. If you have a balance on a utility account when you move or you don’t give them a forwarding address, your final bill or past due balance could be sent to collections without your knowledge. To prevent surprise collections from showing up on your report, make sure you leave a forwarding address for your final bill.
Not all tickets are the result of a police officer pulling your car over and writing you a ticket. Some cities are taking a more stealth approach to handing out tickets by using cameras to capture people who run red lights or stop signs, then mail them their tickets in the mail. Ignoring these tickets is a bad idea. Not only could it result in a suspended license, but traffic and parking tickets are part of the growing list of bills a city will send to a collection account.
Let’s say you turned a few books in late and incurred a fee. Because you don’t visit the library that often, you ignore fine that comes in the mail. No big deal, right? Wrong. Those unpaid fees can come back to haunt you if the library sends you to collections. True, a lender isn’t likely to turn you down for a loan if a $10 collection from a library is the only negative mark on your credit. However, a collection account for any amount will still impact your credit score negatively.
Cable and Internet providers
If you rent or borrow a modem or cable box from your cable company, failing to return it (or getting verification that you returned it) can ding your credit report. Many major cable companies will send you to collections for the amount of the lost or unreturned equipment. The same goes for unpaid bills—shutting off your service is just the beginning. If your bill goes unpaid for long enough, you can pretty much guarantee it will show up on your credit report.
The good news is that a collection account from any company will rarely be a surprise. Companies and cities usually go to great lengths to collect their money before resorting to a collection agency. You can prevent these negative reports by responding to bills or collection attempts immediately rather than ignoring them. This is much easier than trying to get a collection off your credit report.