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Credit Score - Overdue Library Books Can Hurt Your Credit Score! - Free Article Courtesy of ArticleCity.com

Overdue Library Books Can Hurt Your Credit Score!
by: Tiffany Sanders, J.D.

As municipal governments increase efforts to collect unpaid parking tickets, dog-catcher fines, library fines and the like, some consumers are seeing a surprising impact—a radical drop in their credit scores.

To each individual consumer, the fines in question may be very small and collection actions may seem petty and unnecessary. For many cities, however, these unpaid fines and fees add up to millions of dollars a year. Those dollars can be collected with little investment by the cities if they’re turned over to private collection agencies.

Private agencies typically charge a percentage of the balance actually collected, so there’s no risk to the government. The risk to consumers who don’t make those payments in a timely manner, however, is significant. That’s because collection agencies report delinquencies to the three major credit reporting agencies. A single collection item can drop your credit score as much as 100 points. Many consumers don’t know that charges like this can affect their credit.

While not all municipalities use private collection firms, the trend is increasing across the country. As government collection activity rises, so does the number of consumers surprised to discover that they’re paying higher interest rates—or being turned down altogether—because the kids lost a library book or they neglected to renew Rover’s license.

If such charges are already appearing on your credit report, you may be able to negotiate their removal in exchange for payment. Getting items removed from your credit report can be a long and stressful process, though, and there’s no guarantee that you’ll be successful. The best defense is to be aware of the risks and make sure you pay those parking tickets on time.

About The Author

Tiffany Sanders is an attorney who has published two books. Her articles have appeared in numerous newspapers, magazines, newsletters, and web resources in the United States and Australia. She writes bankruptcy law news and articles for www.TotalBankruptcy.com, where sponsoring attorneys provide extensive consumer information and resources related to bankruptcy filing and rebuilding credit after bankruptcy.

(C) 2006, Total Bankruptcy, Inc. This article may be reproduced in its entirety without limitation and without notice, except that any reproduction must include the entire article, which may not be modified in any way, and must include the author bio information contained herein, including the URL and, if published online, a live link to the URL included therein.

When it comes to the car buying process, I simply cannot stress enough to you that before you ever set foot at the dealership you need to have a very good idea of what your financing interest rate is going to be.

The back end of the car deal at the dealership (or the finance and insurance office) can be the source of very tidy profits for any car dealer. Especially for those people who head into the financing aspect of the car deal without having a clue as to what type of interest rate that they qualify for.

So how do you no what interest rate you might qualify for?

In order to get a handle on what type of interest rate you’re going to be up against when buying a car you first need to know what your credit looks like. And the best way to find out about your credit is to obtain your credit report and find out what your FICO (Fair Isaac Corporation) credit score is.

Our federal government has indeed passed a law that allows consumers to get one free credit report every 12 months. Once you do obtain your credit report, you want to look it over carefully and check for any false or even duplicate entries. If you do discover any errors or an equities you should contact the credit bureaus in writing and submit any documentation concerning the error so that it can be removed from your credit report.

When it comes to the car buying process checking your credit just simply cannot be left to chance.

The only drawback obtaining your credit report is the fact that this credit report will not contain your credit score. And your overall credit score is the determining factor as to what type of financing rate you can qualify for.

If after examining your credit report, there appears to be no deleterious entries and your credit history looks good, then chances are your credit score is going to be fine. However, if you have some challenges mixed in amongst your credit, you are going to want to in order to get a report that actually shows your credit score.

Remember, that any unnecessary increase in the interest rate that you must pay for your loan is going to cost you a lot more per month as far as your car payments are concerned. So, make sure that you get both your credit report and your credit score and make sure if there are errors that you get them cleaned up.

Your credit score ranges from 300 to 850. As a general rule if your credit score is 720 or higher you should probably qualify for the best interest rates and any factory or manufacturer sponsored special interest rates.

Obviously, the higher your credit score the better.

If your credit score hovers around 600 or lower… you are at a much greater risk of being declined for your car loan, or at the very least be paying a much higher interest rate.

The bottom line here is simple… when you head into a car dealership to buy a car, this should not be the first time that you are taking a look at your credit history and your subsequent credit score.

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