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 negatively impact 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?
Key Points
- Library late fees don’t typically hurt your credit score because they’re not reported to the credit bureaus.
- However, late fees over a certain amount that are long overdue could be sent to collections, which may affect your credit score.
- Whether your late fees are sent to collections depends on the library.
Can Your Library Late Fees Affect Your Credit Scores?
Generally speaking, libraries don’t report late fees to the credit bureaus such as Equifax and TransUnion. As such, a fine itself won’t hurt your score.
However, overdue library fees can affect your credit scores if your library sells your debt to a collection agency. When library fees are due over a certain amount of time, they could sell the amount you owe to a collection agency, which may affect your credit score.
What Happens If Your Library Sells Your Debt To Collections?
When debt is transferred to a collection agency, it appears on your credit report, which can negatively impact your credit scores.
When this happens, several aspects of your life can be negatively impacted. More specifically, you may have difficulty with the following:
- Getting approved for loans and credit products
- Securing lower interest rates and more favourable loan terms
- Getting a job
- Getting a cell phone plan
- Securing a lease for an apartment
- Getting a good rate on an insurance policy
How Long Will Your Library Late Fees Stay On Your Credit Report?
The length of time that negative information remains on your credit report depends on the credit bureau and the type of remark.
If your library debt is in collections, your credit report will reflect an R9 rating, which is the worst rating you can receive. More specifically, an account in collections will remain on your credit report for up to 6 years.
During this time, your credit score can take a severe hit until your account is cleared.
How Do I Pay My Overdue Library Fees If It’s Been Sold To A Collection Agency?
If your library late fees have been referred to a collection agency, you’ll need to deal with repayment through the collection agency directly instead of with the library.
You should receive notification from the collection agency regarding your outstanding library debt, including how much you owe and how to repay the debt. Reach out to the collection agency and follow their instructions on how to repay your fines, which may include online payments, payment over the phone, or mailed cheque.
Depending on the size of the debt, you may be offered a payment plan if the debt is too high for you to afford to pay in one payment.
When Do Libraries Sell Your Overdue Fees To A Collection Agency?
There is no way to tell exactly when a delinquent account will be sent into collections; it really depends on the library.
For example:
| Toronto Public Library | They may refer your account to collections if you have at lest $50 or more in late fines that are 70 days past due. |
| Woodstock Public Library | This library may sell your overdue library fines to collections if your items remain overdue for over 60 days. |
| Mississauga Library | They may enlist the services of a collection agency to recoup outstanding library fines of at least $20 or more for long overdue items. |
You’ll need to inquire with your particular library to find out what their specific policies are regarding referring library late fees to collections.
| Note: Overdue Library fees are being abolished in most provinces and cities across Canada. |
Where Are Library Fees Being Abolished?
All provinces and territories except Newfoundland and Nunavut have libraries that have abolished late fees. Over the past few years, roughly 300 libraries across the country have abolished late fees, most recently in Burnaby, BC, Winnipeg, MN, Lethbridge, AB, and Kingston, ON.
It’s important to note that the elimination of library late fines does not apply to all libraries. To ensure your debt is not sold to collections, make sure to contact your library.
Should Unpaid Library Fees Affect Your Credit?
However, there may be times when library late fees could indirectly affect your credit score if they’re left unpaid for a long time.
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 hand, 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. Fortunately, more and more libraries across Canada are choosing to abolish library late fees, making this issue potentially obsolete in the near future.
How Will You Know If Your Library Fees Have Been Sent To Collections?
If the library has handed your fines over to collections, the collection agency will notify you about your overdue charges. Any further communication about your library debt will come from the collection agency, and not the library.
Depending on the library, your library privileges may be suspended if your account has been sold to a collection agency until you’ve cleared it.
You may find information about accounts in collections under the public records section of your credit report.
How To Avoid Library Late Fees
To steer clear of late charges, and therefore protect your credit score, consider the following tips:
- Renew Your Items. If you feel like you need more time with your library items, renew them before they’re due to avoid late fees.
- Sign Up For Notifications. Your library may offer email notifications to alert you a few days before your items are due. This can be a friendly reminder for you to either turn your items in or renew them before the due date.
- Return Your Items On Time. Libraries tend to have 24-hour drop boxes that allow you to return your materials at any time.
- Pick Up Your Held Items Before Their Expiry. If you put an item on hold and it’s ready, the item will only be placed on hold for a certain amount of time. In some cases, small fines may apply if held items are not picked up before they expire.
Bottom Line
For the most part, library late fees are not reported to the credit bureaus, which means they won’t affect your credit score. However, there may be cases where the debt may be sold to collections, in which case your credit score could be affected.
