Credit reporting agencies are required by law to include information about overdue child support in your credit report. This information may or may not influence creditors or lenders. Unpaid child support, called child support arrears, remain on your credit report for up to seven years. An agency could make an exception to that rule if you make a deal with them. For instance, if you agree to pay some or all of your arrears, an agency may agree not to report negative information to the credit reporting agencies. Still, usually child support enforcement agencies will not eliminate all negative information, and will at least report that you were delinquent in the past.
Most state Department of Social Services agencies monitor monthly child support payments. They may also monitor when the support is received by the parent receiving payments. When a parent has overdue payments, they are alerted by the Department and the parent is allowed an opportunity to contest the arrears.
Social Services send credit reporting agencies monthly a list of parents who have over $1,000 in arrears. If the parent continues to miss payments or does not pay back the debt, that information will most likely be included on a credit report. Creditors will continue to receive these reports as long as the arrears are unpaid. Balances that are unpaid for 180 days will appear as collection accounts on a credit report. Once overdue child support payments appear in a credit report, banks and other creditors may limit or deny credit until debt is partially or completely paid off.
If you pay back your arrears, but still owe current support, your account will still be reported and it will show a zero balance. Once the account is reported to the credit agency, that information can stay on your report for years after you pay it off. However, the Fair Credit Reporting Act (FCRA) restricts the number of years a credit reporting agency can report negative include on your credit report. Most credit bureaus follow the following guidelines:
- Delinquent accounts will be reported for seven years after the date of the last scheduled payment, before the account became delinquent. The account will still show you were delinquent, even if you pay it off.
- Collections will be reported for up to seven years once the agency turns the debt over to the credit agency, plus 180 days from the delinquency. It will appear in the report for a year and six months since you originally missed the payment to the other spouse.
The only way to improve your credit after you have had unpaid child support is to pay the arrears. Staying current will significantly increase your credit rating, although it will remain on your credit report. If you need to contest erroneous charges, file a consumer dispute with the agency that issued the false report. You will also need to contact the county agency that is handling your child support case, and contact the state child support enforcement unit.