Local government agencies may no longer lower a driver's credit score because of unpaid traffic tickets or parking citations, according to a policy the three major credit bureaus agreed to in a legal settlement with 31 state attorneys general.

Experian, Equifax and TransUnion in March informed debt collectors such as Xerox, the red light camera provider for Dallas, that they were to stop sending notices of unpaid red light camera citations by last week.

"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.”

Motorists with red light camera, speed camera or parking ticket debt on their credit report can expect their records to 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, 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, a Texas activist who runs trashyourticket.com.

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