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The impact of child support on parental credit

On behalf of Janet Boyle of Boyle Feinberg Sharma posted in Child Support on Thursday, July 14, 2016.

Child support is a huge issue throughout the nation. Illinois parents who depend on child support to make ends meet can face serious financial consequences when the obligor forgets or refuses to pay. In some cases, an omission in payment may truly be related to an oversight or an unexpected financial shortfall. In many cases, however, parents responsible for paying refuse to comply with their support orders. It is important to recognize that failure to pay can result in many negative consequences, including poor credit ratings.

Child support is often processed through a state agency charged with collecting and dispersing the funds in question. Consequently, there is official tracking of one’s record of paying. Such agencies report delinquent support to national credit bureaus. On-time payments may reflect on one’s credit reports as well. While on-time payments can have a positive impact on credit scores, non-payment can be extremely detrimental.

When child support is handled outside of a state system, there can be less accountability for missed payments. This can be a challenge for a custodial parent in that there is less external pressure on the other party to comply. However, a parent who consistently makes payments but experiences an unanticipated financial setback may avoid credit problems related to their non-payment because a custodial parent is less likely to report such issues to credit monitoring agencies.

It is ideal for a parent owing support to make a prompt effort to seek a modification in court if there is a significant setback; a lawyer might be able to help an obligor to draw up the documents required to petition for a modification. A job loss, major injury, or seasonal lull in employment could quickly affect one’s finances, but support would continue to accrue without a legal change in the amount owed each month.