Paying a late payment of child support won't remove the derogatory mark from your credit report. However, it can help improve your credit score because the account must be marked on your reports as paid in full. If you make child support payments as part of a divorce or other agreement, you may be wondering how child support affects your credit. The truth is that a late payment can hurt your credit, and not paying long-term child support can have serious credit score implications.
Negative information usually needs to be removed from your credit report after seven years. It is important to review your credit report to ensure that incorrect information is removed and that debts discharged are eliminated after seven years. Child support arrears stay on your credit report for up to seven years unless you make a deal with the child support enforcement agency. An agency may agree not to report negative information to credit reporting agencies if you pay part or all of your past due support.
However, few child support enforcement agencies agree. Most will at least report that you were a criminal in the past. Child Support Negatively Affects Your Credit Score If You Have Late Payments. Collection As with any other form of past-due debt, a collection element in a credit report for delinquent child support debts can seriously damage your credit score.
A good and simple rule of thumb to keep in mind is that anything reported to credit bureaus could affect your credit rating. Once late child support payments appear on a credit report, banks and other creditors can limit or deny credit until the debt is partially or fully repaid. But if it appears in the collections on your credit report, delinquent child support can affect your credit score. A low credit score can affect many aspects of your life, including the ability to purchase loans, take advantage of low interest rates, and get a credit card.
Credit reporting agencies are required by law to include information about overdue child support on your credit report. Tradeline is a term used by credit reporting agencies to refer to all the credit accounts on your report. Like an unpaid credit card payment, delinquency can stay on your credit report for up to seven years. If it's too late and you're being sent for collections, strive to resolve it quickly while taking other steps to consolidate your credit and improve your credit rating.
That said, if you paid your back child support payments and it still appears on your credit report, marked as delinquent, you can challenge it with the credit bureaus. If you have an overdue account on your credit report, settling it or updating the account is the first step towards rehabilitating your credit scores, so you're on the right track. If you fall far enough behind in your payments that your child support is referred to collections, that can also show up on your credit report and further damage your credit score. A child support debt reported to credit bureaus can appear on your credit report in different ways.
Credit reporting agencies are required by law to include information about overdue child support on your credit report. When you apply for your free credit score from Experian, you will include a list of risk factors unique to your credit history. In the long term, a person with bad credit may have to pay hundreds of thousands of dollars more in loan costs over their lifetime than someone with good credit. .