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The Zombie Survival Guide you checked out from your local library in 2003 is back to haunt you. Years of late fees have snowballed, and now your credit is paying the price.
Does this scenario sound more like an urban myth or harsh reality?
Though true tales of zombie library fines are out there, the likelihood of delinquent library fines damaging your credit is now slim. Changes in credit reporting and the operation of public library systems have taken some of the bite out of overdue library fees. Today, library fines should not affect your credit, though you may still want to square up with your local library to clear your conscience and avoid future headaches.
Why Library Fines Likely Won't Hurt Your Credit
Back in the day, forgotten library fines actually could show up on your credit report as an unwelcome surprise. But in 2016, the three national consumer credit reporting agencies—Experian, TransUnion and Equifax—agreed to change the types of public information that appear on credit reports. Among other reforms, the National Consumer Assistance Plan eliminated "the reporting of debts that do not arise from a contract or agreement to pay," such as traffic tickets or fines. As a result, libraries no longer report this information directly to credit bureaus.
Is it a concern if the library sends your account to collections, though? Practically speaking, a library is unlikely to send a very small balance to a collection agency; it simply isn't worth the trouble. And if your account goes into collections for an amount less than $100, the collection account may appear on your credit report, but your credit score may not suffer much as a result. FICO® Score☉ 8, the most widely used version of your FICO score, ignores small-dollar "nuisance" collection accounts in which the original balance was less than $100.
If you are among the few library patrons whose overdue fines are in excess of $100, your credit may indeed be affected if the balance you owe is sent to a collection agency and the agency reports it to the credit bureaus. A collection account will appear as negative information on your credit report for up to seven years. An account in collections is considered delinquent and has the potential to lower your credit score significantly.
How to Resolve Library Fines
Still, it's unlikely (though not impossible) that your unpaid library fines will make it to this point. Libraries themselves are trying to become less punitive as more readers turn to online information or digital booksellers like Amazon instead of risking fines, collections and the humiliation of running afoul of the system. The New York Times reports that libraries in Philadelphia, Los Angeles, San Diego, Chicago and Denver have adopted no-fee or amnesty policies in recent years. And at least one collection agency for libraries has moved to a "gentle nudge" policy that does not involve reporting the late fees to credit bureaus.
Of course, every library system is different. If you've received a notice of overdue fines or you suspect you have unpaid fees, contact your local library. They may have an amnesty program in place or may be willing to accept an alternative arrangement, such as replacing a lost book with a gently used copy instead of a new one. If you're dreading the thought of runaway fees compounding year over year, take heart. Many library systems cap your fees at an affordable flat dollar amount or the price of the book itself.
Whether or not you face a credit consequence for late fees or lost books, you may want to consider wiping out your debt regardless. Reminder notices, collections and old-fashioned guilt trips aren't fun to live with, and coming clean may lighten your conscience. Contributing to the health of your local public library by paying fines or replacing lost books is a good deed of citizenship as well.
What Types of Public Records Do Affect Your Credit?
Library fees are probably not the only public information you'd rather not see pop up on your credit report. What about traffic and parking tickets or civil judgments? Take heart that none of these appear in your credit history. Other items that are not included in your credit report: Your income, bank accounts and their balances, investments and indications that credit applications have been denied.
Bankruptcies are now the only type of public record you might find in your credit report. A Chapter 7 bankruptcy appears as negative information on your credit report for up to 10 years; a Chapter 13 bankruptcy for seven. Bankruptcies affect your credit in a few different ways. Because a bankruptcy reflects poorly on your ability to manage credit, your credit score can drop severely after a bankruptcy filing. A bankruptcy on your credit report may also discourage lenders from offering you credit or may prevent you from getting good rates and terms on loans.
Checking Out Ways to Improve Your Credit
Although chances are slim that library fines from your past will rise up and lay waste to your credit, worrying about this possibility—or a million other potential surprises—can still keep you up at night. If you're concerned about negative information showing up on your credit report, the best remedy is to check it. You can access your credit report from all three credit reporting agencies at AnnualCreditReport.com, or download your Experian credit report and FICO® Score based on Experian data for free at any time.
If you're getting ready to apply for a loan or credit card, you may be able to improve your credit score by factoring in on-time payments for utilities, phone bills and even streaming services for free using Experian Boost™† .