Living with credit

Surprising slip-ups can trash your credit score

Kelly Dilworth

It happens to the best of us.

NBC News reporter Chuck Todd recently learned that an unpaid red light ticket that he ignored (or, according to his tweets, just didn’t see) has tarnished his credit score, according to MediaBistro’s FishbowlDC.
The unfortunate incident that led to the TV news star’s freshly spoiled score apparently occurred in Chevy Chase Village — a small Maryland town just outside of Washington, D.C., that refuses to let even small-time traffic violators off the hook. When it comes to your credit score, even little slip-ups count class=
Unlike other municipalities that usually just absorb unpaid city fines, such as lapsed parking tickets or traffic citations that “get lost” in the mail, Chevy Chase Village turns to debt collection agencies to help strong-arm violators into paying up.
“So I just learned the hard way that an unpaid red-light camera ticket can be part of a credit report,” tweeted Todd, after finding the unwelcome notation on his report. “That seems ridiculous.”
Not all cities turn to collection agencies for help hunting down the everyday outlaws who fail to pay their city dues. So it often comes as a surprise to people, like Todd, who find that misplacing — or, in some cases, blatantly ignoring — a city fine in a town that does partner with collectors can be a costly mistake (especially if you’re planning on taking out a major loan any time soon).
Some jurisdictions, such as Hennepin County, Minn., even go so far as to tack on an extra “collections fee” if they’re forced to turn you and your delinquent fines over to a collector, magnifying the financial pain.
Unpaid traffic tickets aren’t the only kinds of city fines that can get you into trouble.
Depending on where you live, you may get turned in to your neighborhood debt collector if you fail to return a couple of books to your local library, forget to pay for your child’s public school lunches or ignore the garbage collection fees that some cities charge in order to remove the stinky trash from your front lawn.
Understandably, cash-strapped cities are doing all they can to recoup money owed to them and feed their post-recession budgets — even if that means sticking it to residents with a collection account that can remain on a credit report for up to seven years.
But as Chuck Todd noted on his twitter feed last week, a collection notation — which can shave a painful number of points from your FICO score, depending, in part, on how much you owe — is a heavy price to pay if you don’t actually deserve the ticket, didn’t properly receive it or, like many of us, simply misplaced it somewhere.
“My issue with red light cam tickets being tied to credit reports is that there’s no guarantee it was me driving,” tweeted Todd. “In this era where snail mail is so easily ignored, these red light camera municipalities need to come up w/better way to let me know I owe.”
I feel for you, Chuck Todd. As a chronically disorganized, frequent ignorer of snail mail myself, I’ve lost more than a few minor bills here and there — including, most recently, a $30 medical bill that belonged to my husband (luckily I caught it before it was too late) and a utility bill from my previous residence that I threw in a suitcase, then promptly forgot about, before finding it a few weeks later.
Luckily, my frequent bill-losing sins haven’t caught up with me yet. I’ve paid utilities late, I confess, and racked up more than my fair share of library fines, but they’ve never gone to collections. And I’ve only lost a credit card bill once — causing a 30-day late payment mark on my credit report that has a few years to go before it falls off, but is no longer causing much damage to my credit score.
Still, Todd’s recent run-in with a Maryland collection agency is a good reminder to those of us who tend to let things slide when life gets busy: It’s a good idea to pay attention to even the smallest fines you receive, whether they arrived via an envelope in the mail or a ticket slapped to your car’s windshield.
Because these days, when all kinds of businesses and municipalities are hurting for money, even the smallest bill could wind up haunting you years later if you accidentally let it slip.

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