Can Overdue Library Books Hurt My Credit Score?
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Can Overdue Library Books Hurt My Credit Score?

Can Overdue Library Fines Really Hurt My Credit Score Rating?

Scenarios and situations that result in a lowered credit score seem very cut-and-dry. You miss a payment, your credit score is lowered. You apply for too many new lines of credit - your FICO score drops, but did you know credit scores can be negatively impacted through a multitude of other financial decisions? One of the most surprising out of these is the effect overdue library books have on credit scores. While you may think that overdue copy of the latest romance novel isn't that big of a deal, reality suggests otherwise.

Libraries and Credit Scores

First off, libraries don't send payment histories or account information to the major credit bureaus; however, when you begin collecting library fines, and these fines go unpaid, what follows can do great damage to your credit score and overall credit worthiness.

When you're past due on library fines, the library may send your account to a collection agency. For anyone who's understands personal finance immediately understands how detrimental this process can be for your credit report. Did you know that a report of collection agency activity on your account can potentially lower your score up to 100 points? Prevent this activity by familiarizing yourself with the library fine policy. Typically, a library will only send your account to collections if the owed balance is higher than $50, or a similar sum.

Once a collection agency has reported negative activity on a credit report, the impact can last up to seven years, and in some cases even longer. Imagine having your credit score drop by 20, 30 or even 50 points because you forgot to return "The Secret." If you find yourself facing collections because of a forgotten library fine, or a fine you were unable to pay, strive to pay off the entire bill.

Before paying off the fine, however, make the collection agency agree to complete removal of negative marks from your credit report. Get this agreement in writing. While the effects may not be immediate, after some time your FICO score will increase once evidence of collection activities are eliminated. As a rule of thumb, only agree to pay off the fines in full if the collection agency agrees in writing to remove negative remarks. If this is not in writing and signed by the collection agency, you have very little control over the removal of its negative remark.


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