Home > Credit 101 > How Some Divorced Parents Hurt Their Credit

Comments 0 Comments

When parents fall behind on their child support payments, they may be surprised to learn those delinquent payments can appear on their credit reports. What does that mean for their credit scores? A Credit.com reader asks:

I recently pulled my reports and was shocked to see the State of MO is listing my child support in arrears when it is not. I pay it regularly. Is that harming my credit?

First it’s important to understand why and how child support appears on credit reports. “Child support is generally reported as a tradeline,” says Equifax Senior Director of Public Relations Meredith Griffanti. “It is reported directly from the municipality/agency collecting the debt.”

In fact, this reporting is mandated under Title IV-D of the Social Security Act, which requires “states to report periodically to consumer reporting agencies . . . the name of any noncustodial parent who is delinquent in the payment of child support and the amount of overdue support owed by such parent.”

There are procedures in place to try to ensure that this information is accurate. Thomas DeChant, director of client and government relations for Supportkids Services Inc., a private child support collection agency in Texas, explains that the Office of the Attorney General enforces child support in his state. If a parent falls at least 45 days behind on payments, a letter will be sent notifying them that the office intends to report information to the credit bureaus and giving them 30 days to contest it.

Other states follow similar procedures. According to a fact sheet produced by the National Child Support Enforcement Association, before reporting this kind of information to credit bureaus, “states must ensure that such parents have been afforded all due process required under state law, including notice and a reasonable opportunity to contest the accuracy of such information.”

Past-due child support appears infrequently on credit reports, however. “Less than a quarter of 1% of all trades in Experian’s database are child-support related,” says Rod Griffin, Director of Public Education for Experian. But once this information is reported, parents should try to catch up. That’s because child support can be reported for seven years from the original delinquency date (the date the parent fell behind and didn’t subsequently bring the account current). If the parent continues to be behind on payments, that date of original delinquency will renew every month, explains Griffin. “That is the unique thing about delinquent child support.”

Once the child reaches the age of majority, new obligations cease and any derogatory information remains for seven years. There may be state statutes of limitations that apply as well. That means “the date of removal is calculated from whichever comes first: original delinquency date, age of majority or state statute of limitations,” Griffin says.

How to Make Sure Your Reports Are Accurate

Any parent who is paying child support would be wise to check their credit reports (here’s how to get your free annual credit reports) to make sure any information reported about these obligations to credit reporting agencies is accurate. It is also a good idea to monitor one’s credit scores, which can be done for free at Credit.com. Doing so does not affect your credit scores.

As for our reader who believes his credit report contains inaccurate information about his payment history, he should get credit reports from Equifax, Experian and TransUnion. If the information reported is inaccurate, he can dispute it with the credit reporting agencies as well as with the state agency reporting it. This guide explains how to dispute credit report mistakes.

What About Credit Scores?

While child support is typically reported when it is delinquent, resulting in a negative tradeline on the parent’s credit reports, it shouldn’t affect their credit scores. FICO reports that any items reported as child/family support obligations does not affect FICO credit scores, and the VantageScore model does not consider delinquent child support either. Of course that assumes that whatever is listed on the report is identified as a child support obligation — and that’s something parents should be sure to check for when they review their credit reports. “It could say “Department of Children Services/Atlanta/Georgia” but might not specifically say “child support” on it,” says Griffanti.

However, even if it doesn’t affect the parent’s credit scores, it could still affect their ability to get a loan such as a mortgage. Payments listed on the credit report will likely have to be included in the borrower’s debt ratio, says Scott Sheldon, senior loan officer with Sonoma County Mortgages and Credit.com contributor. “Lenders may require that parents catch up or establish a payment plan before the loan will be approved. Consumers who have judgments and/or garnishment payment liabilities should first consult with the lender and get thoroughly preapproved prior to doing any househunting,” he says.

More on Credit Reports and Credit Scores:

Image: Ingram Publishing

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team