Most of us think that things that can hurt our credit score are huge credit card balances, missed or delayed credit card payments and missed loan payments. It may be surprising for most consumers that parking tickets, speeding tickets, and even overdue library books are also treated as debts, and if they aren’t paid, then they can cause our credit score to drop.
According to credit expert Lynette Khalfani-Cox, every day new areas of non-traditional credit are being extended to Americans. People think that these won’t impact their credit score, but the reality is, they really can, she said.
For instance, Omar Al Chaar, a resident of Washington DC, has been issued a parking ticket for almost two years. He eventually got so frustrated with it that he decided to stop paying them. So, when Omar went to apply for a mortgage loan, he learned that his credit score has been dropped 105 points because he didn’t pay his parking tickets.
Fair Issac and Company or FICO, the company that developed the FICO Score, the most commonly used credit score model in the US, takes information compiled in your credit history, and uses it in a mathematical equation in order to calculate your credit score. Creditors used it to determine your credit risk, and to decide whether to give you loans, and how much interest they’ll charge you. FICO Score ranges from 300 to 850. The higher your credit score is the better are the chances of you getting credit with the most favorable interest rates.
Omar got into trouble because unpaid parking tickets are treated just like any other unpaid bills. First you’ll be warned by your lenders, and then you’ll have to pay late fees on your debts. If you still continue to turn a blind eye, then you’ll be referred to a debt collection agency, which will hurt your credit score.kotlas ufa bijsk kostroma blagoveshchensk nadym sortavala samara orsk pokrov tver vyksa miass vyazma krasnoturinsk yugorsk syzran zelenogorsk yurga enisejsk ejsk ohotsk arhangelsk ulyanovsk tynda novocheboksarsk monchegorsk petrozavodsk artem oha belorechensk volgograd rybinsk nizhnekamsk ufa kostomuksha cheremhovo ahtubinsk vologda novouralsk troick chebarkul habarovsk nadym bryansk barnaul inta langepas yuzhno-kurilsk monchegorsk nizhnevartovsk omsk cheboksary raduzhnyj megion tver syktyvkar almetevsk
Rod Griffin, director of public education at Experian said that typically it takes 3 to 6 months before for something like unpaid bills to appear on a credit report, before it’s sent to a collection agency. At that point, the presence of that unpaid bill will have a negative impact on your credit score, he added.
So, if you receive a collection notice for an unpaid bill from your municipality or county, the first thing you should do is pull your free annual credit report from all three major credit bureaus, Experian, Equifax and TransUnion. You can also get your free copy every year from AnnualCreditReport.com.
Second, the complaint will appear in your credit report under the section titled, “derogatory marks”.
Third, if it’s accurate, then payoff the fine as quickly as possible
Fourth, If you thinks it’s wrong, (in case you paid off your bills), but it’s still listed, then dispute it with the credit bureaus. All the major credit bureaus have specific section on their websites where you can submit you written challenges.