Credit Reporting — The Facts
Shannon Daley, Director of Operations
A driving force in our service to your library is our careful protection of your patron relationships. Our success in recovering materials is very much a result of our Gentle Nudge™ approach. We appeal to good people to do the right thing by gently encouraging them to clear their obligations with the library.
Our ultimate goal, of course, is to create sufficient urgency with the patron that he or she
responds to our contacts by returning materials and/or paying fines. Some patrons respond immediately following our first contact. Some respond a little later in our sequence of contacts. And some respond when they understand that an eventual consequence of failing to settle their account with the library is to be reported to the largest consumer reporting agencies in the United States. Simply, the prospect of being credit reported is the leverage some patrons
need to swing into action.
Unique Management’s Gentle Nudge™ approach is a great way to remind patrons that their accounts are still delinquent even after they have returned their materials. Often, patrons will respond and pay their account in full, thus clearing the Library’s records and allowing patrons to continue using the Library.
We know that sound credit is important to most patrons. They ask about it and are often concerned about what it means and how the process works. So the following information should be useful to library staff in helping them understand the facts about credit reporting and how to avoid it.
- Credit reporting occurs only after UMS has had the patron’s account for at least 120 days. Most traditional collection agencies credit report accounts after 2 - 4 weeks. We credit report only as a last resort. We want the library to recover its materials, first and foremost, so we give patrons ample time and make numerous attempts to encourage the patron before credit reporting.
- Referring the patron’s account to UMS is not the same as credit reporting. UMS is your material recovery service. The fact that we have a patron’s account does not impact the patron’s credit in any way. Only after submitting the account to consumer reporting agencies, is the patron’s delinquency available to credit grantors — such as mortgage companies and banks.
- Once credit reported, the library account will stay on the patron’s credit report.
- In most cases, a patron with an unresolved library debt will not be able to obtain credit for loans, credit cards, etc. However, once the debt has been resolved, the debt will show as “paid” on the patron’s credit report and should not impede the patron’s credit. In other words, the patron can resolve the credit related issue simply by resolving their account with the library. However, it may take 4 - 6 weeks, for the paid debt to be reflected on the patron’s credit report. If the patron is pending loan approval, UMS will fax verification to the patron that the debt has been cleared so that credit approval can be granted by the lender. A faster option to reflect the debt as “paid” is to use our InfoLink utility to print out a “paid in full” letter on UMS letter head. If you are unfamiliar with InfoLink, call your UMS Customer Service rep to for set-up. It’s really easy!
- Showing the debt as “paid” on the patron’s credit report is not the same as “expunging” the debt from the patron’s credit report. When a debt is expunged, it is removed entirely from the patron’s record as though it had never been there. UMS has a contractual agreement with the consumer reporting agencies to expunge only those accounts that were reported in error. For example, if the patron cleared the account at the library and we never received the update, the patron could be credit reported in error. In such a case, the credit reporting agencies would agree to expunge the patron’s account. If the debt was valid, then it can only be shown as “paid.” However, as previously mentioned, we have always found this sufficient to restore credit. Additionally, UMS has made arrangements with the consumer reporting agencies to have paid in full
accounts removed from credit reports one year after the paid date.
- If the patron has extenuating circumstances surrounding the debt, the patron has a legal right to submit a brief, written explanation for inclusion on the credit report. Consumer reporting agencies are required by law to enter such explanations as part of the patron’s credit file.
- Juvenile accounts are not credit reported because the parent or guardian is ultimately the responsible party for the juvenile’s debt and because it simply protects patron goodwill for the library when we avoid the image of credit reporting children.
Since our goal in serving your library is to protect your relationships with patrons, we use credit reporting only as a last resort to create sufficient urgency to clear the account. Only a relatively few ever get to that point, but having the facts can help you alleviate patron anxiety and assist patrons in resolving their obligations to the library.