Can Unpaid Tolls Affect Your Credit Score?
Understand if and how unpaid highway tolls might impact your credit score. Learn about the indirect ways these debts can affect your financial standing.
Tolls are fees charged for using specific roadways, bridges, or tunnels, contributing to the infrastructure’s maintenance and development. A credit score is a numerical representation of an individual’s creditworthiness, influencing access to loans, housing, and other financial services. Understanding the potential connection between these two distinct financial concepts is important for managing personal finances effectively.
How Unpaid Tolls Affect Credit
An initial unpaid toll does not directly impact a person’s credit score, as tolling agencies do not report directly to credit bureaus. The process begins with the toll authority identifying the vehicle by its license plate and mailing a violation notice to the registered owner for the original toll amount plus administrative fees. If this initial notice is ignored, fees and penalties escalate.
Continued non-payment leads to the debt being transferred to a collection agency. It is at this stage that the unpaid toll can begin to affect credit. Once a collection agency reports the delinquent account to the major credit bureaus—Experian, Equifax, and TransUnion—it becomes a derogatory mark on a credit report, lowering the individual’s credit score. These negative entries can remain on a credit report for up to seven years from the date of the original delinquency.
Persistent unpaid toll debts can lead to civil judgments, which represent a court order for payment. While civil judgments may not appear directly on credit reports, the underlying debt, if previously reported by a collection agency, would still impact the credit score. Civil judgments also remain public records that can influence potential lenders or landlords.
Managing Toll Obligations to Protect Credit
To prevent unpaid tolls from escalating into credit issues, utilize electronic toll payment systems, such as transponders or mobile applications. These systems allow for automatic and timely payments, eliminating the risk of missed invoices. They link to a prepaid balance or a bank account, ensuring tolls are deducted seamlessly as one travels. Keep contact information and payment methods updated with toll agencies. Regularly checking account balances or statements for electronic toll systems can help identify and resolve any issues early.
If a toll is missed or a notice is received, pay any outstanding tolls and associated fees immediately to prevent the debt from being sent to collections. If there is a dispute regarding a charge, contact the toll authority promptly; many agencies offer procedures for disputing incorrect charges. Individuals can also monitor their credit reports regularly for any unexpected entries. Reviewing credit reports allows for the identification and dispute of any inaccuracies.
Tolls and Your Credit Score
Paying tolls on time does not positively impact credit scores. Toll authorities are not traditional lenders and therefore do not report positive payment history to credit bureaus. Credit scores are designed to reflect the management of credit accounts, such as loans and credit cards, not routine fees for services.
The only way tolls can affect credit is negatively. This occurs when delinquency leads to the debt being sent to collections or results in a civil judgment. It is the failure to manage the financial obligation associated with an unpaid toll, rather than the toll itself, that can lead to adverse credit consequences.