An Overdue Library Book Could Scuttle Your Dreams Of Home Ownership

That unreturned library book could threaten your credit score if it becomes a permanent fixture on your shelf. According to the New York Times, libraries are treating borrowed materials as debts and siccing debt collectors on borrowers who fail to pay longstanding late fines. The Queens Public Library has used Unique Management Services to collect over $11.4 million from delinquent borrowers, who may not realize that their unreturned books could eventually stand between them and a mortgage.

When a patron fails to return a book and is then billed for it by a library, Mr. Bowling said, “it is a legitimate debt, and it is credit-reportable.”

It is not clear how many library patrons are reported to credit bureaus, or how many of them have trouble getting credit as a result. The three main credit bureaus, TransUnion, Equifax and Experian, compile information from lenders and debt collectors and provide it to banks and other lenders who use it to estimate how likely a consumer is to repay a loan — and thus who should get credit and at what interest rate.

Federal regulations limit only how old a late payment can be before it is reported and for how long — seven years — that negative information can stay on a consumer’s record. It is up to credit bureaus to decide what kinds of payments to record, and they generally choose the ones that they think will be useful to the lenders who are their clients, said Rebecca Kuehn, assistant director of the Federal Trade Commission’s division of privacy and identity protection.

Experian and TransUnion accept reports from Unique, according to spokesmen for those companies, but only put debts of more than $50 on consumers’ records.

Now we know to save those return receipts the New York Public Library hands out, just in case. If an unreturned library book does appear on your credit report, say, one from 1971 that you’re sure you returned, break out a stick of Dentyne and send a dispute letter to the credit reporting agency .

How One Overdue Book Can Hurt a Credit Record [NYT]
News Flash: Library Fines Can Hurt Your Credit Rating [Gothamist]
The Library [Seinfeld Lists]