Monday, January 7, 2008

New Threats To Your Credit Score (MSNBC.COM)

Everyone knows that an unpaid creditor can leave a mark on your record for years to come. But now, even your health club or local librarian can lower your score.

Most people know, and can accept, that an unpaid credit card bill can wind up in a collections account that will devastate their credit scores.

But did you know that your credit also could suffer from an unpaid parking ticket, a traffic fine you ignored or a forgotten library book?

A growing number of local and state agencies are using private collection companies to boost their revenues. More than 600 public libraries from Eugene, Ore., to Broome County, N.Y., turn unpaid accounts over to private collectors like Unique Management Services. Cities and courts hire others, including Municipal Services Bureau, to track down overdue parking, traffic and court fines.

Many collection agencies quickly report these overdue accounts to at least one of the three major credit bureaus, and the black marks send consumers' credit scores tumbling. Anyone who's had a spat with a phone company, health club or an insurer turn into a collection knows that this is a pretty big club to waive over the heads of consumers.

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