What would you think if you were turned down for a mortgage because your son checked out a library book on his account five years ago and failed to return it, even though you’ve already paid all of the fines? Unfortunately, this is a very real scenario in Philadelphia.
The city is fighting a rapid decline in home ownership rates in the lower-middle class neighborhoods. Ownership rates in Philadelphia declined over 5% between 2000 and 2010 according to U.S. Census data. Encouraging home ownership is an important step in combating blight and increasing the financial wellbeing of Philadelphians, so you would think that Philly would be doing what it can to help qualified residents buy homes.
Unfortunately, the current policies of the Free Library of Philadelphia do anything but help. During the course of our rental and credit repair services, I’ve looked at the credit reports of hundreds of Philadelphians. In my experience, the two most frequent collection items on peoples’ reports are Black Expressions Book Club (don’t get me started on them) and the Free Library. These collections drive down credit scores and cause residents to pay higher interest rates or to be denied credit altogether. I would be surprised if higher interest rates due to Free Library collections weren’t costing residents millions of dollars each year.
Now I’m not saying that the library shouldn’t hold people accountable. They absolutely should, and credit reporting is a valid way to do so (although for amounts less than $100 this seems rather punitive). The problem is the library’s policy. The library absolutely refuses to remove negative entries from your credit report even after the debt has been settled in full. Is the entry preventing you from buying a house? Too bad. Is it forcing you to pay a predatory rate of 20% on your car loan? Tough luck. Is it hurting your chances of getting a job because your potential employer pulls credit? Oh well. To make matters worse, the library has a policy whereby you are personally responsible for the account of any child under the age of 18. If they get a library card and forget to return something, it’s going on your credit report and it’s not coming off for seven years!
The library has the legal right to refuse to remove a paid entry from a credit report, but most other creditors will work with you once you’ve paid the balance that you owe. Why won’t the library? I have no idea! I’ve talked to several people on their staff. They are all very nice, and some of them openly disagree with the library’s policy (at least when talking to me). But they all say they are powerless to change the policy, and can’t put me in touch with anyone who has that authority. It’s a real shame, Philadelphia is shooting itself in the foot once again.
If you’re out there, and you know someone who has influence with the library, please let them know what’s going on. Philly needs your help!