How Does Wage Garnishment Affect My Credit Score?

Woman reviewing her paycheck.

The following article is presented for informational purposes only and is not intended as credit repair advice or instruction.

No one wants to have their wages garnished. If your paychecks are being garnished, it's likely because you fell behind on a debt and the creditor took you to court to make you pay. The garnishment will end once the debt is paid off or if you've made a alternative arrangement with the creditor.

While the garnishment will definitely eat into your income and might make it harder to manage your monthly bills, does it have any impact on your credit score? And is there any reason to hurry up and pay off a debt once a garnishment is in place?

Wage garnishment isn't included on your credit report

So does a wage garnishment hurt your credit? Technically, no, not really.

From a credit perspective, the damage has more or less been done. Since your wages are likely being garnished as a result of having missed payments on one or more debts, your credit may have been dinged, but it was the missed payments that hurt your score.

The fact that an old debt, either a credit debt or a tax debt, is being paid through a garnishment doesn't usually show up on most credit reports. What does show up is the fact that the debt was delinquent and that there is a judgment against you for the unpaid debt.

Like with most negative marks on your credit history, the delinquency and the judgment will eventually fall off your report after seven years. There’s nothing you can do to speed up that process. Paid or unpaid, that judgment will stay there for the full seven years and unfortunately it will have a negative impact on your score until then.

Ending a wage garnishment is in your best interests

Once the garnishment is in place, is there any incentive to end it sooner than later? 

There are two reasons why you may want to consider ridding yourself of the garnishment ASAP. The first is in the event that you need to apply for a loan. While your credit report will not contain any information related to your garnishment, the loan application itself will almost certainly require you to list any liabilities, which would include the fact that your wages are currently being garnished. Given that your credit score may already be somewhat damaged, having an ongoing garnishment will only make borrowing more difficult.

The second is a budgeting concern. The garnishment eats up a portion of your monthly budget, which takes away some of your budgeting flexibility. Because your garnishment comes out of your paycheck automatically, you don't have the option to direct those funds elsewhere in the event of an emergency. 

If you're worried about a potential wage garnishment, talk to a certified credit counselor right away to discuss your options. Counseling is free and available 24/7.

Tagged in Debt collection, Laws and legal questions, Build your credit score

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.8/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Consumer Federation of America Consumer Federation of America
    MMI is a member of the Consumer Federation of America (CFA), an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • Department of Housing and Urban Development Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.