Nearly half of Mississippians have a delinquent debt in their credit files. That’s according to a new study which says the state is third in the nation when it comes to delinquencies.
The Urban Institute says more than one-third of Americans – and 45 percent of Mississippians – have a debt in collections reported in their credit file. The study found the average debt in collections in Mississippi was just over $4400.
Caroline Ratcliffe, senior fellow at the Urban Institute says these reports stretch back seven years and can include an array of non-mortgage bills, including unpaid credit cards.
"Debt in collections also includes unpaid bills, so unpaid utility bills, it could be a parking ticket, medical bills," she says.
Ratcliffe says delinquent debt can have a far-reaching impact, since it can harm credit scores and is reported on credit files.
"So it can restrict access to credit. It can increase the cost of credit, for example both mortgages and credit cards," she says. "Employers can gain access to credit reports so it can tip employers hiring decisions. It can increase insurance costs, and it can also impact whether or not you can get that apartment."
Pearl Wicks is senior vice president for retail at Jackson-based Hope Credit Union. She says their advice to consumers is to plan, and try to live by, a budget and to pull their credit report at least once a year.
"We do find that some people don't know that some things have been reported to the collections agency until they're seeking credit, and at that time, they've got to investigate it, if it's factual or not, and get it removed if it's not factual, or start the process of paying it, if it is," she says.
Consumers can get one free credit report from each of the three major credit bureaus per year by visiting the website www.annualcreditreport.com.
Ratcliffe of the Urban Institute says a Federal Trade Commission study last year found that 25 percent of consumers found errors on their credit files.