News Flash: Library Fines Can Hurt Your Credit Rating

Slowpokes and procrastinators beware: Late fees from overdue library books in New York could be costing you points off your credit score. The New York Times has an article today that describes how the The New York Public Library and the Queens Public Library have been using a private company named Unique Management Services, which is a collections agency that library late fines are referred to when not paid by book borrowers. One rabbi in Far Rockaway found this out when he tried to apply for a mortgage!

The Queens Public Library system has been using Unique since 1996 and the New York Public Library (operating branches in Manhattan, Staten Island, and the Bronx) started working with Unique in 1995. The Brooklyn Public Library relied on Unique to hound people who hadn't returned books or other materials between 1998 and 2003, but discontinued the relationship when it found it was not generating as much revenue as it expected.

The Queens Public Library is the largest library system in the U.S. in terms of circulation. Approximately 21 million items were taken out by the borough's 2.3 million residents. Throughout its 11 year relationship with Unique, the Queens Public Library collected $11.4 million from library card holders, and about half of that sum was derived from late fines.

According to the Times, 70% of people contacted by Unique eventually return materials or pay some part of their fines. Still, once the company has contacted the various credit bureaus which maintain credit ratings, the adverse effect can remain a blot on your score for seven years.