4 Ways Late Child Support Payments May Affect Your Credit
Being responsible for child support costs can affect your financial standing in a variety of ways. How you pay, the frequency of payments, and whether you pay on time can impact your credit in particular. This may make larger purchases, such as a car or a home, difficult. If you are currently making child support payments and want to ensure your credit remains in good standing, there are a few facts to keep in mind about how late payments can affect you.
- It May Lower Your Credit Score
Your credit score reflects how well you manage debt and whether you make payments on time. This information can come from a variety of sources, including your debtors. Late child support payments will likely be reported and could lower your credit score drastically with each missed or late payment. While every situation is different, failure to pay can ruin your creditworthiness.
- Reports Can Remain for Years
If you miss child support payments, the delinquency may be reported to one or more credit bureaus, where it can remain for up to seven years. These reports can pile up on your report and have a serious impact on your ability to gain credit in the future. You can remove these reports by catching up on payments and alerting the bureaus that you have done so.
- Credit Inquiries May Be Declined
Even if you had good credit in the past, late child support payments can lower your score significantly and impact your ability to obtain credit when you need it the most. For example, if your car breaks down past the point of repair and you need to buy a new one, car dealerships and their lenders may turn you down because of your late child support payments. Continued rejections can also lower your score, which can make it difficult for you to recover.
- Arrears Can Ruin Credit
Child support arrears, or payments that are well past due, are usually reported to credit agencies. These can be difficult to resolve unless you pay what is owed. The government may even become involved and place liens and levies on your assets, which can ruin your good credit standing. If you find yourself struggling to pay arrears, consider consulting an attorney who can help you resolve the issue so you can start to rebuild your credit.
Late or missed child support payments can have a negative impact on your credit and make it difficult for you to obtain financing for large purchases. Contact a lawyer today to learn more about how you can resolve your child support debt and work toward rebuilding your credit score.