No one likes parking or traffic tickets. Maybe you made a quick stop at the wrong spot or didn't see a fire hydrant hidden in the bushes. These things happen. It can be an unfortunate $50 to a few thousand dollars out of your pocket.
What’s worse is when parking or traffic fines lead to increased insurance rates or a negative impact on your credit score. That’s why it’s vital to pay your parking tickets on time. A ticket paid on time isn't reported to credit bureaus and won't affect your credit for better or worse.
In contrast, unpaid fines could end up with a collection agency. This process negatively affects your credit because it shows as a delinquency on your credit report.
In this article, we explain how parking tickets affect your credit in Canada. We also dive into what happens if you don't pay a ticket, what you can do if you miss a payment, and how to remove such a stain from your report.
What Happens if I Don't Pay a Parking Ticket?
When you don't pay a parking ticket, it can end up with a collection agency. This could affect your credit report and decrease your credit rating.
But a ticket can take several months to make its way from your car to your credit score.
The process is generally the same as an unpaid phone or utility bill: you don't pay the statement by the due date, and your creditor sends you a few messages or calls. If that doesn't work, your creditor sends the amount owing to a collection agency to hastle you for the outstanding amount on their behalf.
Unpaid tickets also often accumulate interest and penalties when left unpaid, which commonly begin after the fine has been outstanding for over 30 days.
This varies depending on your province or municipality. Some areas may even provide discounts if you pay early! So, it's a good idea to pay off unpaid tickets as early as possible unless you attempt to fight it.
If you try to dispute your ticket, it may freeze interest and penalties until there's a resolution. Again, this depends on where you got your fine.
When the parking authority sends the ticket to collections, all the penalties and interest are sent with it. So, a $150 ticket on your dash could be $200 by the time it makes it to the collection agency. Interest may continue accumulating while the debt is in the collection agency's hands. What is a Collection and How Does it Affect My Credit Score?
Collection agencies are companies that lenders or creditors use to recover past-due amounts. With a parking ticket, a parking authority may hire a collection agency after it makes multiple failed attempts to ask you for the parking or traffic ticket fine amount.
Once the ticket issuer outsources the parking fine collection to the agency, the debt is reported to credit bureaus as a delinquency. This report drags down your credit score because it exemplifies your inability to pay an outstanding amount.
Collection agencies may use more aggressive debt collections strategies than the original issuer of the ticket. You can expect more than just a letter in the mail. An agency may call you regularly or even show up at your door until you pay the outstanding balance.
What Can I do If I Missed a Parking Ticket Payment?
Municipalities and cities each have their own way of handling missed parking ticket payments. After the due date, you might have to pay through the same process as before — just with added penalties and interest.
If the debt is sent to collections, it's a bit more complicated. Collection agencies could have their own processes to pay the outstanding amount. But more importantly, you now have a negative mark on your credit report.
The first step to managing a parking fine in collections is to pay it off. Afterwards, you can request that the creditor remove the delinquency from your credit report.
Can I Remove an Unpaid Parking Ticket From My Credit Report?
Once a city sends your outstanding amount to collections, the fact that you missed the payment is added to your credit report. The delinquency could last on your credit score for seven years (or even more) from the original delinquency date (when your debt passed its due date).
But you can remove the missed payment by filing a dispute with a credit bureau or writing a goodwill letter to the creditor.
You should file a dispute if you see information on your credit report that you believe is inaccurate or incomplete. Usually, you need to go through individual credit bureaus for this.
For example, you might have paid the parking fine, but the municipality made an error and still sent it to collections. In this situation, you want to dispute the penalty with the credit bureaus and prove that you paid the debt on time.
In contrast, you send a goodwill letter to the creditor that reported your outstanding debt. This letter is essentially an apology for your late payment and helps explain your intentions.
Maybe you made an honest mistake and forgot to pay for the ticket. Or, perhaps you never even knew about the parking ticket because the wind blew it off your windshield. Sometimes, a goodwill letter is just a phone call asking the city to remove the credit report mark after you've paid the fine — a letter might not even be required.
Your credit rating should go up once your record is fixed, regardless of your route.
It's a good habit to check your credit report regularly. You never know when a parking ticket flies away with the wind. If you didn't know you had unpaid fines, paying them on time is hard.
Regular credit report checks and monitoring ensure these situations don't catch you by surprise. The last thing you want is to apply for a mortgage and discover your credit score faced a massive hit from an overdue ticket you never knew about.
Borrowell lets you check and monitor your credit score regularly without lowering your score in the process.
What Other Kinds of Public Records Affect Your Credit?
Public records are publicly available legal items relevant to your financial picture. This information may be key to lenders, landlords, and others who use your credit report to determine your creditworthiness. It can include the following:
Bankruptcies & consumer proposals: Bankruptcy is a situation where you can no longer pay your outstanding debts. A consumer proposal is where you create a legally binding agreement to make an alternative proposal to paying off debt to creditors. If you've filed for bankruptcy or a consumer proposal, people will be able to see it on your credit report. Both these have a severe impact on your credit score.
Non-criminal judgements: Civil disputes usually result in a large debt. A lawsuit could mean you're responsible for thousands in damages and legal fees. If someone sues and you lose, the resultant debt could show up on your credit report.
Like an overdue ticket, these public records stay on your credit report for six to ten years, but it really depends on what the record is. For example, consumer proposals are removed three years after they’re paid off.
The Bottom Line
Unpaid parking and traffic tickets can end up in collections and ultimately hurt your credit score, and a damaged credit score could hurt your chances of being approved for a whole host of credit products.
Even if you miss a parking fine payment, there are ways to make the best of a bad situation. Paying it off and speaking to the municipality that gave you the parking ticket could help remove this nasty stain from your credit report. You could also dispute the delinquency if you believe the credit bureau improperly recorded it.