Will Defaulting On Season Tickets Hurt My Credit?

Published

January 23, 2015

Deanna Templeton is a financial literacy advocate with 15+ years in the banking and consumer credit industries, including five years with FICO in their credit scoring division. She specializes in educating consumers on the importance of healthy credit management, and shares valuable insight on consumer credit and finance issues.

We recently received a reader question that was very interesting — something we hadn’t thought of before. This one’s for you sports fans out there:

Does anyone know the impact of defaulting on season tickets will have on one’s credit? Will it have an impact on my car insurance, current loans for cars, or anything else? Please let me know.—Angry Fan

How defaulting on season tickets would impact your credit would depend on whether or not the organization reports the incident to the credit reporting agencies. If the default is reported as a collection, because collection accounts are considered severe delinquencies, the account would have a significant impact on your current credit standing and would hurt your credit scores. This wouldn’t necessarily impact any accounts you currently have open, but if the impact is significant and your credit scores take a severe hit, it could affect future loans, their interest rates and your ability to qualify for them.

Your question prompted us to make a couple of calls to find out exactly how season ticket holder accounts are handled by major league sporting establishments. Interestingly enough, individual policies will vary depending on the establishment, but what we learned may ease your mind.

According to the two major league establishments I spoke with, season tickets are normally paid for in advance, prior to the tickets being released and issued to the purchaser. Generally speaking, there are no contractual payment plans or financing options for standard individual season ticket purchases. However, depending on the ticket package, some plans may allow the purchaser to hold their preferred tickets with a deposit, offering them a short grace period before they’re required to pay the remainder of the balance.

In the event the purchaser is unable to pay the remaining balance before the deadline defined by the establishment, the hold is ended and the tickets are re-released to the public for purchase. In some cases the deposit will be refunded, and in others the deposit may be forfeited. It all depends on the purchase rules outlined by the individual establishment. In either case, defaulting on a season ticket purchase would have no bearing on your credit unless there were a contractual obligation or financing option involved with the purchase.

For corporate packages or purchases where suites are a part of the season ticket package, it’s an entirely different ball game. Suites are contractual and legally binding. If you sign a contract and default on the purchase agreement, this is when defaulting on season tickets could end up as a collection in your credit reports and hurt your credit scores.

For a more information about credit scores and collections, here are several resources that we recommend:

Image: iStockphoto