Does Child Support Affect Your Credit?

Making child support payments can put a serious strain on your personal finances, not only through the payments themselves but also in your ability to borrow. Falling behind on child support payments can lower your credit score, which in turn makes it more difficult for you to borrow money at a low interest rate.

On-Time Payments

Making child support payments as scheduled generally does not affect your credit. This is because the agency that collects payments, or your child's parent if you make direct payments, does not report on-time payment history to the credit bureaus. Information that is not on your credit report cannot affect your credit score.

Late Payments

If you fall behind on child support payments, your state child support enforcement agency will contact you to try to secure payment. If you fail to comply as requested, the child support agency will report the lack of payment to the credit bureaus. This will lower your credit score and make it more difficult for you to obtain credit in the future. In addition, once you have to start paying child support to a collection agency, the agency reports whenever you have a late payment, which further damages your score.

Solutions

If you fall behind on child support payments, stay in touch with the agency that collects payments. Pay as much as you can afford to and explain the situation that led to your delinquency. If you are cooperating as much as you are able, the agency is less likely to report the late payment to the credit bureaus. If your financial situation has changed since the initial child support order, you can initiate a petition with the court to reduce your payment amounts so you can keep up more easily and not damage your credit.

Considerations

Although on-time child support payments do not affect your credit score, they might still affect your ability to obtain credit. Some lenders, especially for mortgages, calculate the ratio of your debt obligations to your monthly income. Mortgage lenders typically require your total debt obligations, including your proposed mortgage payment, to be less than 36 percent of your gross income. Court-ordered child support payments count as part of your debt, so these payments can decrease your borrowing power.