Do Unpaid Toll Bills Affect Your Credit Score?

Unpaid toll bills can affect an individual’s financial standing. While a toll bill itself does not directly appear on a credit report, unpaid bills can indirectly lead to negative credit impacts. This happens through escalating penalties and collection agency involvement. Understanding this progression clarifies how these charges can influence creditworthiness.

When Unpaid Tolls Lead to Collections

Toll authorities generally do not report directly to credit bureaus regarding unpaid tolls. Instead, the process typically begins with the issuance of an initial bill or violation notice for the unpaid amount. If the toll remains unpaid, late fees and administrative penalties are usually added to the original charge.

After a period of non-payment, the toll authority may transfer or sell the outstanding debt to a third-party collection agency. This transfers the debt from the original authority to a collection agency. The collection agency then pursues the unpaid balance, along with any accumulated fees and penalties.

How Collection Accounts Impact Credit

Once a debt is transferred to a collection agency, that agency can report the collection account to the major credit bureaus: Experian, Equifax, and TransUnion. A collection account appearing on a credit report can negatively affect credit scores. The presence of a collection account signals to potential lenders that a debt has gone unpaid, increasing perceived risk.

Collection accounts remain on a credit report for seven years from the date of the original delinquency, which is the first missed payment that led to the collection effort. The negative effect on credit scores is most pronounced when the collection account first appears, gradually lessening over time. While paying off a collection account will show it as “paid” on the credit report, it does not remove the entry entirely before the seven-year period expires. Some newer credit scoring models, such as VantageScore 3.0 and FICO 9, may disregard paid collection accounts. However, older FICO models, like FICO 8, are still widely used and might penalize paid collections.

Steps to Address Unpaid Tolls

If you have an unpaid toll bill, the first step is to contact the relevant toll authority directly to understand the outstanding balance and any associated fees. Many toll authorities offer online portals to check balances and may provide options for payment plans to manage the debt. You may also have the option to dispute incorrect charges by providing documentation.

If the debt has already been sent to a collection agency, communication with the agency is necessary. Verify the debt to ensure its accuracy before making any payments. You may be able to negotiate a payment or settlement with the collection agency, as they often purchase debts for a fraction of the original amount.

Regularly Reviewing Your Credit

Regularly checking your credit reports is important for monitoring financial health. You can obtain a free copy of your credit report from each of the three major nationwide credit bureaus—Experian, Equifax, and TransUnion—weekly through AnnualCreditReport.com. Reviewing these reports allows you to identify any collection accounts or other inaccuracies that might appear.

If you find an error on your credit report, such as an incorrect collection account related to a toll, you have the right to dispute it. You should initiate a dispute directly with the credit bureau that reported the information and also consider contacting the company that provided the incorrect information to the bureau. Providing supporting documents with your dispute can help in correcting inaccuracies.