Failing to pay child support, also known as falling into arrears, can have a long-term impact on your financial status. One possible outcome is suffering a reduced credit score due to a delinquency being added to your credit report. Overdue child support is required to be included in a credit report by law. This information could potentially influence creditors and lenders and may remain on a credit report for up to seven years.
The Risks of Unpaid Child Support
When the courts finalize a child support agreement, the terms of the court order are not optional or negotiable. All parties involved must obey the rules and requirements laid out in the child support order. If the parent who is ordered to pay child support fails or refuses to do so, he or she could face a variety of consequences. The penalties for failure to pay can be severe, including criminal charges and a jail sentence. Other potential consequences include wage garnishment, property liens and being held in contempt of court.
Credit Consequences for Failure to Pay Child Support
Federal law requires credit reporting agencies, such as Equifax, Experian and TransUnion, to include unpaid or overdue child support payments in an individual’s credit report. Child support arrears will remain on a credit report for up to seven years. In this time, creditors and financial lenders may decide to deny credit based on the unpaid child support. However, these decisions are left up to the individual establishments.
While failing to pay child support can have a negative impact on one’s credit report and credit score, prompt payment of child support will not build good credit. Paying a child support obligation on time each month will not have an effect on one’s credit history. However, it is still important to keep up with payments for legal reasons and to avoid a negative mark from being added to the credit report.
Avoiding Harm to Your Credit
If you have fallen behind in your child support payments, the Department of Social Services – the agency responsible for monitoring child support payments – generally has to notify you that you are in arrears and give you the opportunity to pay what you owe or contest the allegations. If you never missed a payment, you will be given the chance to prove this using financial records.
If you are in arrears in child support but are able to bring your account up to date by making payments, this can prevent the delinquency from being added to your credit report. Furthermore, most states only require agencies to report overdue child support debt in excess of $1,000.
Can You Remove Child Support Arrears From Your Credit Report?
According to Credit Bureau guidelines, once a parent falls behind on a child support obligation, payment delinquencies will remain on a credit report for seven years after the first missed payment – even if the individual pays back child support owed. However, it may be possible to have a delinquency removed sooner than seven years by coming to an agreement with the reporting agency.
The Department of Social Services may agree not to report the delinquency to a credit agency if you come to a payment agreement or deal where you pay some or all of what you owe. However, most agencies will not agree to completely ignore the lapse. Most will still report that you were delinquent on your payments in the past.
The only way to improve your credit report after you have fallen behind on child support payments is to pay what you owe and continue keeping up with your payments. While your delinquency may still remain on your credit report, keeping up with payments can improve your credit in the future. If you wish to dispute erroneous charges or a false credit report, you may need assistance from a San Diego family law attorney.