Will A Child Support Order Affect My Credit?
Child support plays a crucial role in many families. After a divorce or separation, child support orders help ensure that children receive the financial resources they need for their care. The main purpose of a child support order is to support the child’s best interests to ensure financial parity in both homes. The effect that child support orders may have on your credit is not something that crosses many people’s minds. However, the effect on your credit is very real.
Child Support Orders Are Legally Binding
Child support orders are legally binding court orders. It establishes a financial obligation requiring one parent to contribute to the costs of raising the child. Child support orders are not meant to be a penalty, or to “punish” or “disadvantage” one parent. They are meant to ensure both parents share responsibility for the child’s financial needs for parity in both homes, even if one parent handles most day-to-day caregiving. A child support order functions much like any other financial obligation enforced by the court.
How Credit Reporting Comes Into Play
Credit reporting agencies collect and maintain financial data on individuals. This data might include details on loans, credit card balances, and other obligations. If the Department of Child Support Services becomes involved in your case, child support payments will, generally, be reported to credit bureaus. Like any other debt or financial obligation, this can have positive AND negative impacts on credit scores depending on how it is handled.
Positive Impact on Credit: Consistently making on-time child support payments creates a financial history of responsibility and reliability. This could be seen by creditors as a positive history and lead to more favorable terms in the future. Negative Impact on Credit: Missing a child support payment or making late payments can be reported to credit bureaus. This inconsistent history can result in a lower credit score. People with lower credit scores can be seen as higher-risk when seeking loans, potentially leading to less favorable terms or difficulty securing loans.
It is also important to keep in mind that unpaid child support payments can lead to actions such as wage garnishment, liens on property, or other court-ordered collection efforts. These negative actions can also damage your credit score.
Contact Cardwell Steigerwald Young LLP
Consistently making your obligatory child support payments can benefit your credit by creating a history of demonstrated financial responsibility. On the other hand, failing to meet your obligation can lower your score, and lead to further negative action such as wage garnishment or liens on property. Because child support can have a real impact on your financial well-being it is important to understand what you owe and how to ensure you meet the terms of your order. There are also avenues to potentially change the amount you have been ordered to provide in child support under certain circumstances. An experienced San Francisco child support and family law attorney can help you to assess the details of your case and plan your next best steps as you move forward.
