Do Toll Collections Go On Credit Report?

Toll roads are common in many transportation networks, offering quicker travel for a fee. A common question is whether unpaid tolls affect credit reports. While an initial unpaid toll does not directly impact a credit score, this changes if the debt escalates to a collection agency. Original toll authorities typically do not report unpaid tolls to credit bureaus. However, if left unaddressed, these debts can indirectly lead to negative credit report entries.

How Unpaid Tolls Become Collections

When a toll goes unpaid, the debt typically progresses through several stages before reaching a collection agency. The toll authority identifies the vehicle via its license plate and mails an invoice to the registered owner. This initial notice may include administrative charges, which often vary by authority but are usually a few dollars. If payment is not received, subsequent notices are sent, often with additional late fees or penalties. For example, some authorities may issue civil penalties if the debt remains outstanding after an extended period.

Toll authorities generally do not report directly to credit bureaus, as tolls are not considered traditional consumer credit. However, if the toll and accumulated fees remain unpaid after multiple notices, often after 60 to 120 days, the debt may be referred or sold to a third-party collection agency. This transfer marks a more serious stage, as the original toll authority has exhausted its internal collection efforts. Some authorities may also initiate vehicle registration suspensions for significant unpaid balances.

Credit Report Impact of Toll Collections

Once an unpaid toll debt is transferred to a collection agency, its potential impact on a credit report becomes direct. Collection agencies can report delinquent accounts to the three major nationwide credit bureaus: Experian, Equifax, and TransUnion. A collection account on a credit report indicates a defaulted debt that has gone unpaid before being turned over to a collector. This entry appears as a negative mark on a consumer’s credit file.

The presence of a collection account can significantly lower credit scores, including FICO and VantageScore models. Payment history is a primary factor in credit score calculations. The negative impact is most severe when the collection account first appears, with its effect lessening over time. A collection account generally remains on a credit report for up to seven years from the date of the original delinquency, which is the first missed payment that led to the collection effort.

Even if a collection account is paid, it typically remains on the credit report for the full seven-year period. However, a “paid collection” is generally viewed more favorably than an “unpaid collection.” Newer credit scoring models, such as FICO Score 9 and VantageScore models, may disregard paid collection accounts or reduce their negative impact compared to older models. Some models may also disregard smaller collection amounts. Any collection account signals a past financial obligation that was not met, which can affect lending decisions.

Resolving Outstanding Toll Debts

Addressing outstanding toll debts is important for maintaining financial health. First, identify if you have unpaid tolls by checking with the relevant toll authorities, often through their websites using your license plate number and state. You can also review your credit reports, available annually for free from each of the three major credit bureaus, to see if any collection accounts related to tolls have been reported.

Once an outstanding debt is confirmed, determine whether it is still with the original toll authority or has been transferred to a collection agency. If with a collection agency, they are required to send a debt validation letter within five days of initial contact, detailing the amount owed and the original creditor. You can contact the collection agency to discuss payment options. It may be possible to negotiate a settlement for less than the full amount, as collection agencies often purchase debts for a fraction of their value. Negotiations can potentially reach 50-70% of the total debt.

Another option is requesting a “pay-for-delete” agreement, where the collection agency agrees to remove the negative entry from your credit report in exchange for payment. While not universally accepted and technically violating accurate credit reporting principles, some agencies may agree. It is crucial to get any agreement, whether for a settlement or a pay-for-delete, in writing before making payment. After payment, verify the debt is accurately updated to “paid” on your credit report, or removed if a pay-for-delete was agreed upon. To prevent future issues, ensure prompt payment of all tolls, perhaps by using electronic transponder systems or regularly checking for outstanding balances online.