Unpaid traffic tickets could hurt your credit score

WASHINGTON — Would another $680 million help out cash-strapped New York City? How about $58 million more for Milwaukee, or $30 million for Detroit?

Those cities would reap millions if they could collect on unpaid traffic and parking tickets, but in an era when speed cameras, red light cameras and high-tech parking meters have created multimillion-dollar municipal revenue streams, record numbers of tickets are going unpaid.

Now your credit score might take the hit if you’re one of the millions of scofflaws who thought you could shred that ticket summons with impunity.

The village of Chevy Chase in Maryland, a Washington, D.C. suburb, whose speed cameras have generated thousands of tickets, is one of the jurisdictions who are turning over unpaid tickets to collection agencies. If those debt collectors get the stiff arm from motorists, the credit score people rely on to get mortgages and car loans gets dinged.

“They can have a serious impact on your credit,” said Barry Paperno, spokesman for Fair Isaac Corp. (FICO), a credit service company.

He said that although an unpaid traffic ticket doesn’t equate to a foreclosure or a bankruptcy, when a frustrated collection service reports it to a credit bureau, the consumer pays the price.

“Someone with a 680 score could loose roughly 50 points from the addition of a collection of this nature,” he said. “For someone with a 780 score — very, very good credit —the appearance of one of these collections could lower their score by as much as 105 to 125 points.”

Credit scores go from a low of 300 to a high of 850, with the range between 650 and 750 considered about average. Paperno said it’s unclear how many cities turn to collection agencies.

“Some municipalities routinely do this, whether it’s parking tickets, traffic tickets or, in some cases, even library fines,” he said. “We don’t keep records on the extent to which this is done.”

Washington is offering drivers with old delinquent tickets a chance to pay up through Jan. 27, but the city does not use a collection agency. Few large cities do, but in tight times that may change.

“When you look across the country and see the number of people who are thumbing their noses at unpaid parking tickets you realize one reason why cities are in financial trouble,” said John B. Townsend II, a spokesman for the American Automobile Association. “As much as we don’t like tickets, this is a real problem for cities.”

He said many drivers may ignore red-light and speed camera tickets because, unlike those issued by an officer, there’s no way of knowing who is behind the wheel. That means the vehicle’s owner generally won’t have a problem when he or she renews a drivers license.

Many drivers who are passing through a place they don’t expect to revisit any time soon disregard parking or traffic tickets.

“Now you have states taking a more aggressive stance,” he said.