While alimony or child support is not a traditional trade line, it can still affect your credit. Seeing the terms "child support" or "alimony" on a credit report usually negatively affects your credit rating, because it indicates you are seriously behind on your child support. If you cannot make payments, you should contact a pertinent party immediately to preserve your credit rating and to avoid a lawsuit.
Identification
Owing child support can affect your credit rating, but it depends on how long you have owed money and sometimes how much. State child support agencies report delinquent payments to the credit reporting bureaus when you owe more than $1,000. The state may file a lawsuit or send the account to a collections agency when you have delinquent bills for more than 180 days, according to LegalMatch.
Effect
A child support judgment or delinquent alimony account stays on your credit history for seven years and can affect your FICO credit rating by over 100 points, especially when you have a high rating -- around a 780 and above -- according to Maxine Sweet of Experian. Also, lenders can ask about child support obligations when you fill out future loan applications. Too many debt obligations compared your monthly income may disqualify you from a loan.
Paying the Balance
Once you pay the child support arrears, the account still appears on your credit report, but with a balance of $0. If the child support debt went to a collection agency, the credit bureaus must remove the account once you successfully pay the balance due. You can also remove child support arrears from your credit history when it is listed as an error.
Tip
If you fall behind on payments or it appears that you might, return to the judge that handled your case or contact the custodian, suggests Michele Kimball of Divorce360. You might convince the judge to lower your payments, especially when you cannot afford your monthly alimony bill or have a temporary hardship like unemployment.
0 comments:
Post a Comment