A low credit rating can spoil your financial plans as it earmarks you as a potential risk for various mainstream lenders out there. While nobody tanks their credit score on purpose, occasionally, they end up doing something that damages their credit rating without their knowledge.
So, do fines affect your credit rating? Perhaps not as much as they used to.
Every parking ticket that is issued against your vehicle is reported to a collection agency. Even library fines and other late payments, if left unattended or unpaid, might end up in court. Depending on the circumstances of the case, the court may then award you a higher penalty or record a conviction if you are found guilty. However, it is unlikely that such unpaid fines will impact your credit score.
According to the regulatory changes made in February 2020, writs and summons are no longer considered publicly available information and cannot be listed on credit reports. Thus, your credit score isn’t likely to be affected by unpaid speeding or parking fines that are taken to court after the regulatory changes came into force in February 2020. However, that doesn’t mean you should not pay your fines because there are legal implications you need to worry about.
Multiple loan and mortgage rejections
Whenever a credit card or loan application is made, it is officially documented by the bank or lending institution in question. For subsequent applications, even if you attempt to pursue a new lender, past rejections could pose problems for you. While rejections don’t directly result in your credit rating being affected, more applications may mean more hard inquiries, which might reflect negatively on your credit rating.
Whenever you are thinking of making a credit payment or filing a new application for a mortgage, do consider scanning through your credit file first as a precautionary measure. This helps you to spot any inconsistencies, should there be any, and proceed with the most sensible course of action.