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Child maintenance credit rating implications 05/11/2014 Government proposals could affect the credit rating of separated parents who fail to contribute financially to the upbringing of their children

Child maintenance credit rating implications

The Government plans to ensure that separated parents who fail to contribute financially to the upbringing of their children, face ruining their credit rating from next year.

From March 2015 (subject to Parliamentary approval), the Child Maintenance Service and Child Support Agency will begin sharing certain information about the payment records of their clients with credit reference agencies.

This means that arrears built up in maintenance payments will have the same effect on people’s credit score as other debts. Having a poor credit rating can cause people to be refused loans, mortgages, credit cards, hire purchase finance arrangements, mobile phone contracts and other forms of financial credit.

Principally, information will be shared about an individual when a liability order is made against them – a measure used as a last resort after other efforts to encourage payment have been exhausted. In the year April 2013 to March 2014, 12,410 liability orders were granted.

But it is also expected that the introduction of the new measure will have a deterrent effect on those who may otherwise choose to evade maintenance payments, so getting more money flowing to the children and families who need it.

Non-resident parents who have a good maintenance payment record will also be able to request that information about them is shared if they feel it may help improve their credit rating.

 

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