Look Out for Parking Tickets

Besides affecting American consumers, the economic downturn of the last five years has greatly impacted the budges of cities, counties, and states. Limited tax dollars have forced various government bodies to stretch their budgets and attempt to make every dollar go farther. Many agencies at the state and local levels have turned over debt collection to collection agencies for things as small as parking tickets and library fines. This is a big issue for consumers because now unpaid parking tickets could appear on your credit report.  

Credit reports and the associated FICO credit score are becoming increasingly important. In the past, credit reports were used only by mortgage lenders to determine whether or not to lend money to prospective customers. Now, however, the credit score and report are used for many other purposes; employers inspect them in order to avoid hiring financially irresponsible employees, landlords use them to determine whether they can rely on a tenant to pay their rent. Since they are used more often, keeping blemishes off your credit report is more important than ever.  

In earlier years, only unpaid debts or bankruptcy filings prevented the issuing of credit. Now, since credit reports are utilized by so many more businesses, things as small as unpaid parking tickets and library fines can prevent someone from getting a job or a lease.  

Not all cities, though, report unpaid fines to the credit bureaus. Worse is the fact that, while the company that originated the FICO score has adjusted their scoring system to account for small fines, some lenders have not. Whether or not such little blotches affect your credit score can be figured by something as simple as where you live or who you do business with. Buyers need to be conscious of the fact that some small debts may factor into the credit score and that the only way to recognize them is to check your credit report frequently. 

Most Americans can get a free copy of their credit report at www.annualcreditreport.com. Many people who have had their scores negatively impacted by small fines were not conscious of the fact that they even owed these fines, which happens often when debtors have recently moved. Simply paying the fine can promptly resolve any problems and raise the credit score back to its normal level, so be sure to check your credit report regularly!