Tips for Improving your Credit Score and Keeping Credit Cards Open

Credit scores are an interesting result of the expansion of the free market and the growth of technology in the last decade. You now have a number associated with you and that number determines whether or not you can rent an apartment, get a cell phone, or qualify for a home mortgage. You can probably still get by without having a credit score, but life is becoming much more difficult to live without having a pretty decent FICO score, so it makes sense that people would want to put some effort into making sure they have a decent FICO score. Your priorities should be straight; you shouldn’t pay on your credit card when you can’t afford to eat just so that there is no black mark on your credit score. There are some things which affect your credit score that you might not think of.

We all know that not paying on a credit card or skipping a mortgage payment will negatively affect your FICO score, but you may not have known that a library book fine and unpaid parking tickets can also affect your credit score. It is becoming a trend that state and local agencies are turning to collections agents for all sorts of unpaid receivables, such as parking tickets, traffic fines, library book fines, and the like. If they think you owe them, chances are a credit collection agency might be after you.

State and local agencies are putting more effort into collecting these small debts because of budget shortfalls from overspending when tax revenue was higher. Tax revenue has shrank for a lot of state and local governments in the last few years, and their reserves are drying up quickly, so now they are attempting to fill other holes to make up for the shortage.

In the past, enforcement and collection of these very small penalties has been pretty lax. Times are changing though, and these organizations are now clamping down on these unpaid receivables. Instead of just letting an unpaid debt sit around, they will sell a large amount of them to a collection agency at a fraction of the amount owed, take that money, and the collection agency will try to collect the debt that agency is owed.

On an individual basis, this process might not make sense, but in major cities there are tens of thousands of unpaid parking tickets. If a city sells 10,000 unpaid parking ticket debts at $25 for each ticket to a collection agency at 25 cents on the dollars, the city just made over $60,000 on debt they probably would have not otherwise collected.

Consider this a friendly warning if you have any unpaid tickets that you might just let slip by. None of us like paying them, but now they are having bigger implications, and we might want to make sure that our credit scores don’t get dinged for something so easy to take care of.