Most Canadians are aware that missed payments can affect their credit scores. In general, you’ll want to avoid missing payments or making late ones, as it can affect your credit scores and thereby your ability to access future credit. But what about library fees? Could your library late fees negatively impact your credit scores?
Can Your Library Late Fees Affect Your Credit Scores?
Whether your library fees should or shouldn’t impact your credit scores has become a somewhat controversial topic, forming two different opinions.
- On the one side, some believe that library fees aren’t significant enough to be considered real debts and therefore shouldn’t impact your credit scores. Moreover, it’s debated that if library fees are considered real debts and outstanding payments related to library fees are reported on your credit report then positive late fee payments should be reported too.
- On the other hand, some argue, if library late fees are legitimate costs that people incur for not returning a book, why shouldn’t they be included in your report as a “delinquency”? Credit scores are meant to communicate how effectively an individual can pay a bill or debt on time, if a late book fee is not paid then that should contribute to your credit scores.
Both sides have valid arguments, but whether your library fees affect your credit depends on the library’s late fee collection policy.
When Do Library Late Fees Affect Credit?
While libraries themselves do not report late payments to the credit bureaus, your library fees could affect your credit if your library sells your debt to a collection agency. When debt is transferred to a collection agency it appears on your credit report which can negatively impact your credit scores. There is no way to tell exactly when a delinquent account will be sent into collections, it really depends on the library.
What Type of Information Appears on Your Credit Report?
Your credit report is a detailed file of your credit history which includes your payment history, length of your credit history, how much debt you have, and the types of credit you have. Listed below is the type of information that is found on your credit report.
- Personal information that is available on public records
- Chequing and savings accounts closed ‘for cause’ due to owed money or fraudulent activity
- Whether you made payments on time and/or missed any payments
- Inquiries from lenders and other entities who have requested your credit report within the last three years
- Date accounts were opened
- Bad cheques or non-sufficient funds payments
- Total amount you owe
- Bankruptcy or any other court decision against you relating to credit
- Credit you use, including (but not limited to) credit cards, lines of credit and loans
- Debt in collections
- Whether you went over your credit limit
- Remarks, such as consumer statements, fraud alerts, and identity verification alerts
- Registered items, such as an asset currently being used as collateral
- A letter is assigned to each account to identify the type of credit you’re using and a number shows when payments were made
Fortunately, library fines and traffic fines don’t show up on your credit report because it is not considered a debt that came from a contractual agreement. However, if your fees are sold to a collection agency, it could impact your credit.
How Long Does Negative Information Stay on Your Credit Report?
The duration of how long negative information stays on your credit report differs depending on the nature of the delinquent item. Generally speaking, negative information will remain on your report for approximately six years, after which it’ll disappear from your credit report. The duration also depends on the credit bureau, TransUnion and Equifax have unique policies related to how long information stays on your report.
As a rule of thumb, see the below credit record information types and the corresponding length of time it remains on your report when it is ‘negative’ in nature.
| Credit Payments | This includes credit cards and lines of credit. Credit transactions remain on your report for roughly 6 years. |
| Bank Accounts | Any negative activity (ex: fraud) within a chequing or savings account remains on your report for about 6 years |
| Debt Collection | Debt that has been sent to collections stays on your report for approximately 6 years. |
| Consumer Proposals | This information will remain on your report for about 3 years after the amount has been paid. |
| Registered Items | Any registered items, such as liens, can stay on your report for up to 10 years, depending on where you live. Equifax holds information for up to 10 years in PEI and 6 years everywhere else, whereas TransUnion holds the information for 5 years. |
| Bankruptcy | In general, bankruptcies stay on your report for roughly 6 to 7 years. In the case of multiple bankruptcies, it remains on your report for approximately 14 years. |
| Credit Inquiries | These stay on your report for 3 to 6 years, depending on the credit bureau which is Equifax and TransUnion respectively. |
| Legal judgments | Any debt resulting from a lawsuit will remain on your credit report for roughly 6 – 7 years depending on the credit bureau and province you live in (except in PEI where it is 10 years). |
Find out why did an account in collections disappear from your credit report?
Bottom Line
The only way someone can avoid debt and collections drama is by always paying their debts on time. If you are having trouble making your payments on time, you may want to consider consulting a professional to discuss your options. Loans Canada can help match you with the right expert.
