Delinquent Child Support Downs Credit Rating
Better Credit…Better Options
If you have an obligation to pay regular child support, be sure that those payments are made on schedule, as failing to do so may adversely affect your credit score. Most consumers are surprised at just how big an impact a missed child support payment could have. Federal and state laws have increased the penalties for missed child support payments and they are treated as public records on your credit report. These types of records have an extreme impact on your credit score.
Non-payments or late payments of child support can be reported as delinquent debts to the credit bureaus. As in any unfulfilled obligation, the credit bureaus will calculate these into your credit scores, which can then have a substantial negative effect on your overall credit rating. An outstanding balance or constantly late child support payments can be so damaging to the credit score that securing any loan becomes very difficult.
Your manner of payment will largely influence how child support can affect your credit score. If the payments are channeled to a third-party collection agent or a state agency, it is likely that the failure to meet the obligation on time will be reported to the consumer credit reporting bodies. In some states, child support collection agencies allow a 30-day grace period before filing a late payment. Others do not. With direct payments made to the parent who has child custody, it is unlikely that a late payment will be reported to the credit bureaus. Nonetheless, this would still present a direct problem with the other parent.
Also, habitually late child support carries other adverse consequences. In some states, failure to provide child support in time can result in your driver’s license being revoked, wages garnished, or bank accounts levied. There could even be jail time for the worst, repeat offenders. Alternative payment options will have to be negotiated if it has really become a struggle to fully comply with a court-ordered child support.