Is it True That a Credit Report Only Shows Violations That Are $50 or Greater?

When it comes to credit reports and credit scoring, there are a lot myths and misconceptions floating around out there. Some people mistakenly believe, for example, that only debts above a certain dollar amount are included on reports. This is not true. In fact, even the smallest unpaid debt can be listed on your credit report and end up damaging your credit score.

Creditors

A creditor is anyone to whom you owe money. This list not only includes traditional lenders such as banks or credit card companies, but also includes such organizations as municipal governments that have cited you for a parking violation or even public libraries to whom you owe a late fee. Even small dollar amount parking fees and similar debts can appear on your credit report, according to CNN Money.

Checking Your Reports

Every consumer has the right to review credit reports every year. The Federal Trade Commission has authorized annualcreditreport.com as the only site to provide each consumer with free yearly credit reports. Your reports will list all the information reported to the three credit reporting agencies by your creditors and may include information about the size of the debt as well. While you can have incorrect information removed, you cannot remove accurate information.

Reporting Process

Three companies maintain consumer credit reports: Experian, TransUnion and Equifax. When a creditor wants to add information to your credit report, it has to report the information to one of these companies. Creditors don't always report information to these companies, nor do they always report to all three. The frequency with which creditors report debtor information and the kind of information they report differs by creditor. While some creditors may not report debts unless they are of a minimum dollar amount, others may report all information automatically.

Collections Agencies

One common method by which low debt amounts might appear on your credit report and hurt your credit score is when a creditor hires a collection agency to collect a large number of debts. For example, a municipal government might hire a collection agency to collect all unpaid library fines. The collection agency typically reports to a credit reporting company, and once the municipal government hires the agency, the agency reports all delinquent accounts regardless of the size.