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How child support could affect obtaining a car loan

There are plenty of divorced parents in Illinois who are making or receiving child support payments. And while most understand these payments are intended to go toward cost of living expenses -- like food, shelter and clothing -- many are shocked to learn that either paying or receiving child support can have an effect on how lenders view their financial risk situation.

An example is buying a car, as either making or receiving payments can end up playing a role in a lender's decisions on whether or not to grant a loan.

For the parent who is paying child support, if he or she is behind on payments, it may be difficult to get approved for a car loan. For the lender, the line of thinking is that a parent who is delinquent on payments has a higher chance of changing jobs a lot in order to avoid having wages garnished to pay back what is owed. Additionally, in cases where a parent is behind on child support, it shows up on a credit score, which can further decrease the chances of being approved for a loan.

Additionally, when it comes to trying to get approval on a car loan, receiving child support can be viewed negatively. For the lender, the uneasiness centers on the fact that child support payments cannot be garnished. For the lender, this would mean if a person has their vehicle repossessed for not making payments, the lender is not able to start garnishing child support to get back what is owed to them.

Of course this isn't to say all lenders will automatically reject a person based on the fact he or she pays or receives child support. In those situations where a person is being paid child support, the chances of being approved for a loan greatly increase if he or she has a job. Long time employment with the same company also increases the chances.

And, for the parent who pays and is behind on child support, if an arrangement has been made to get current on payments, bringing documentation to support this will often go a long way toward obtaining a loan.

Source: Auto Credit Express, "Child Support and Bad Credit," Steve Cypher, Sept. 24, 2012

  • In Missouri child support payment amounts are determined by guidelines. However, most parents who are either paying or receiving child support still have quite a few questions. To learn more -- or if you are behind on payments -- please contact our Illinois child support page.

25 Comments

We're born alone, we live alone, we die alone. Only through our love and friendship can we create the illusion for the moment that we're not alone.

Many women wait years before they try to collect back child support, many times the father does not even know that they owe...this is what has happened to my husband. After 14 years, his ex has decided he still owed back child support. Even though she received SSDI auxiliary benefits for the child which exceeded the court ordered amount...she claims now it was a "gift" and her atty. claims that she waited all these years so she could get the 9% interest. She wants him held in contempt and jailed too...funny, did she wake up from a coma and decided he still owed her? Now the interest is more than the support owed and the $24,000 more she collected from the SSDI auxiliary benefits were just a GIFT? Funny that a man getting $12,000 a year from disability can afford that much of a gift.....

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