Will A Small Missed Payment Hurt My Credit Score?

“I FOUND OUT THAT I HAVE A $25 PARKING TICKET FROM 2009 THAT I DIDN’T PAY. THE OUTSTANDING AMOUNT WAS TURNED OVER TO COLLECTIONS. IS THIS GOING TO RUIN MY CREDIT?”

No. Not only will it not ruin your credit, it won’t even affect your credit. Under the revised FICO credit-scoring guidelines that went into effect in 2009, small outstanding debts that are less than $100—such as a forgotten parking ticket, a missed library fine or an unpaid medical bill—will no longer reduce your credit score. Since the purpose of a credit report is to help lenders analyze the risks involved in lending a large sum of money, the credit-scoring model was tweaked to reflect this. There are two things you should keep in mind about the $100 limit, however. First, since all debts sent to collections under the $100 threshold will still appear on your credit report, lenders can and often do look at those outstanding debts; it may not affect your credit score, but it may affect how lenders view your credit-worthiness. Second, the $100 limit applies not only to the original outstanding debt, but also to any late fees or service charges incurred. For example, if the original amount was for $85 and you were then charged a $25 late fee, the new total amount of $110 would no longer fall under the guidelines and your credit score could be negatively affected. ∆