Under rules that took effect last week, government agencies may no longer lower a motorist's credit score over unpaid traffic tickets or parking citations. The three major credit reporting agencies, Experian, Equifax and TransUnion agreed to the new policy in a legal settlement with thirty-one state attorneys general last year (view settlement text).

Xerox, the red light camera provider for Dallas, Texas, explained the change in an April 8, 2015 letter to the city obtained by TheNewspaper.

"The credit reporting agencies will eliminate the reporting of debts that did not arise from a contract or agreement by the consumer to pay, such as tickets or fines," Xerox collections director Michael D. Brown wrote. "Experian has already submitted a cease and desist notification to Xerox for all credit reporting transactions listed as unacceptable data... Examples include, but are not limited to: towing charges, vehicle storage fees, parking and traffic tickets/fines, toll road fines/fees."

In March, the three credit reporting agencies informed debt collectors like Xerox that they were to stop sending notices of unpaid red light camera citations by June 15, 2016.

"Do not report debt that did not arise from a contract or agreement to pay, including, but not limited to, certain fines, tickets and other assessments," the credit reporting agency document explained. "For example, library fees or fines, parking tickets, speeding tickets, and court fees or fines."

Motorists with existing red light camera, speed camera or parking ticket debt on their credit report can expect that their records will be cleared. Under the legal settlement, consumers have new rights to dispute incorrect items on their report.

The policy could have a major impact in states where the use of collection agencies and debt reporting has been the only means of enforcing citations that use civil, not criminal, legal procedures. In Texas, for example, it is up to the discretion of the county assessor whether to put a hold on vehicle registration over an unpaid citation. Most counties will allow registrations if the vehicle owner comes to the office to renew in person, according to Byron Schirmbeck, the Texas activist who runs trashyourticket.com.

"We have known for a long time that payment of civil photo-enforcement tickets in Texas is virtually optional," Schirmbeck told TheNewspaper. "Starving the system of cash is the quickest way to end the programs."

A copy of the credit reporting documents is available in a 3mb PDF file at the source link below.