As of a 2015 NPR report, more than $113 billion in child support debt was owed in the U.S. And that debt doesn’t just affect those who are waiting on child support checks.
Delinquent child support can get listed as a tradeline, or account on your credit report. It is reported to credit bureaus directly by the municipality or agency collecting the debt.
And, having unpaid child support on your record can have a “substantial, negative” affect on your credit score, according to an email from Rod Griffin, director of public education for credit bureau Experian.
These negative affects could lead to higher interest rates or being declined for a loan as long as the delinquent child support remains in your credit history, he said.
In some states, even late or untimely child support payments can work against you as much as if you missed another financial payment, such as a mortgage, according to an email from a TransUnion spokesperson.
“When payments are made as required, the account will reflect on-time payments and potentially have a positive impact on the consumer’s credit report,” the TransUnion spokesperson said. “Late or missed payments would have a negative impact, just like late payments on a car loan or credit card bill.”
It is important to look at the specific rules and regulations in your state, as they vary by location. Some state laws only require child support obligations be reported when they hit a certain threshold, based on the amount owed or days late. The TransUnion spokesperson also noted that those delinquencies would have an adverse impact on a consumer’s credit report.
If you receive a delinquency letter from a state agency, it’s a good idea to contact the agency as soon as possible. Some agencies have a short time limit on how long you have to respond to their letter before the delinquency is reported.
Attorney Andrew G. Vaughn, owner of NuVorce divorce firm and Domestic Relations law professor at Loyola University Chicago School of Law, recommended working out child support payments directly with your child’s other parent if possible, noting that rules are a little tighter if payments are made through a state agency.
“If your state allows direct pay to your [child’s other parent], you can usually avoid these credit problems even if you fall behind in payments,” Vaughn said. “It is unlikely your [child’s other parent] will report you.”
Get to Court Quickly
The reality is, most people fall behind in support because they’ve lost a job or their income was reduced. “If that happens, it’s important to get into court immediately to ask to reduce or pause the support obligation,” Vaughn explained. He said this is because each month a payment goes unpaid counts as a mini-judgment against you.
You may want to consider hiring an attorney to make sure this petition is filed correctly. If it isn’t, you may still be held responsible for payments until you file correctly, and any missed payments during this time can appear on your record.
If you do miss child support payments, but eventually catch up, this will be noted on your credit report.
“Once paid, the child support entry will be updated to show ‘satisfied’ and will remain on the [credit] report for 7 years from the original delinquency date,” Griffin said.
But it is possible that it will appear on your report for longer.
“The unique thing about child support is that, if unpaid, the child support judgement can be renewed each month, meaning the original delinquency date updates every month,” Griffin said. “If unpaid, the child support entry can remain until the child reaches the age of majority, which could be longer than 7 years.”
Monitor Your Credit
If you have outstanding child support and the other parent of your child(ren) sue for what is owed, and the judge rules in that parent’s favor, you’ll likely end up with a judgment on your credit report. Judgments can be very damaging to your credit. You’ll see a dip in your scores once the judgment is on your credit reports, but how much depends on factors like where you live and if you pay or settle the judgment.
You can see how unpaid child support or judgments may be affecting your credit by viewing two of your credit scores for free, updated each month, on Credit.com or pulling your free credit reports every 12 months on AnnualCreditReport.com.
More on Credit Reports & Credit Scores:
- The Credit.com Credit Reports Learning Center
- How Do I Dispute an Error on My Credit Report?
- How Credit Impacts Your Day-to-Day Life