After a divorce or in cases of unmarried parents, the California Family Court expects both parents to contribute to the expenses involved in raising children, including housing, food, and medical care. When the California court issues an order for child support to the higher-earning or non-custodial parent, it continues to monitor the support account through the California Department of Child Support Services.
All child support orders are also automatically reported to credit reporting agencies. The report goes to the credit agency whether or not the parent is in arrears. However, it’s important to know that prompt payment of your child support orders won’t build a favorable credit history, whereas failure to pay and falling in arrears can have a negative impact on a credit report.
How Does the Department of Child Support Services Monitor Child Support?
When a paying parent has overdue payments, the Department of Child Support Services typically notifies the paying parent that they are in arrears. The paying parent may contest the arrears or file a petition for a modification of child support orders if they’ve experienced a substantial and ongoing alteration in their financial situation such as a serious illness, an accident that prevents working, or the loss of a job.
When a parent is over $1,000 behind on payments, Social Services sends a notification to credit reporting services. The agency typically sends a monthly list of all parents in arrears. For every following month that the amount remains unpaid and the balance owed grows, that information is included on that parent’s credit report.
The only way to improve a credit rating after a reported arrear is to pay off the amount owed. Even then, the fact that you were in arrears remains on the report for up to seven years.
Once I’ve Paid Back Child Support Will My Credit Score Improve?
Credit Bureau guidelines demand that delinquent reports remain for seven years after the last non-delinquent payment. Even after the parent pays it off, the credit history still shows past delinquency until the seven-year period ends. In spite of this, child support payers can work on improving their credit scores through the following steps:
- Making any late payments in full
- Keeping the account current with no further late payments
- Contesting any erroneous charges of late payment by filing a consumer dispute with the child support agency that made the mistake in error
- Contacting the county child support agency handling your case to report the error or the payment made to catch the account up to date
- Contacting the state’s child support agency
- Submitting a written dispute to all three major credit reporting agencies, including Experian, Equifax, and Transunion
Once cleared, the credit bureau should update the status of the account to indicate that it’s current.
Penalties for Late Payments
A negative on a credit report is only one consequence of falling behind on child support payments. In California, there is also a 10% interest amount added to back-owed child support, plus a 6% to 22% penalty for an account that’s more than 30 days behind. There are also many options the state uses for child support enforcement including:
- Diverting wages
- Intercepting tax returns
- Intercepting lottery winnings or gambling winnings
- Placing a lien on real property owned by the parent in arrears
If you’ve fallen behind on your child support payments, it’s important to speak to a Los Angeles child support attorney about your rights and obligations under California family law. It’s always a much better choice to file a motion for a modification of child support orders if you’ve experienced a significant change in your financial circumstances rather than to fall behind on your payments.