Wage Garnishment / Credit Score Impact

Does Wage Garnishment Affect Credit Score?

Written by Ben Tejes
Updated Nov 13th, 2023
The information provided in this article does not, and is not intended to, constitute legal or financial advice; instead, all information, content, and materials available in this article are for general informational purposes only. 

If you are having your wages garnished, it’s likely that you have many questions running through your head. One of the most common questions we see is the question of whether or not your credit score will be hurt by wage garnishment procedures.

The short answer is not really — though this needs a far more nuanced answer. In most cases, it's the unpaid bills and delinquent accounts that harm your credit score, not necessarily the wage garnishment. This article will go much deeper into this answer, and what you can do to help boost your score after debt. 

What is a Wage Garnishment?

Wage garnishment occurs when a creditor you owe money to takes their payments directly from your paycheck. Instead of getting your standard paycheck, you will only receive a percentage of that check. Creditors automatically receive the other portion. This will continue until you no longer owe that creditor anything. 

Is There a Wage Garnishment Limit?

Luckily, the law limits what part of your wage is eligible for garnishment. The federal regulations state that no more than 25% of your disposable income can be garnished. However, if the debt you owe is child support or alimony, in some states up to 50% of your income can be garnished. 

How Does a Wage Garnishment Occur?

When you fall behind on payments to a creditor, there are some options they have. One of the many options is to file a lawsuit against you. Should they win the lawsuit, the court will allow wage garnishment. 

If you are notified of a lawsuit, there are a few things you can do.

Fight the Lawsuit:

 If you are able, hire a lawyer and have them defend your case. This option may not be suitable for everyone. You could also fight back by simply asking the creditor to provide all of the required documents to prove you owe the debt they are accusing you of. If the entity suing you is a debt collection agency, there is a chance they don’t have everything they need to win their lawsuit.

Ignore the Lawsuit: 

While this option is probably the easiest way forward, it also will have an outcome you probably don’t like. If you ignore the lawsuit, your creditor will win the case by default. This tactic may work if you know that you will lose the case anyway and don’t want to waste any of your time or money on the process. However, there is almost never an open and shut case.

Work Directly With Your Creditor: 

Reach out to your creditor directly! Oftentimes, creditors file lawsuits just to try and recoup a small portion of their cost. Reaching out with a proposed payment plan or settlement can keep you from a court case or garnishment. 

Whatever you decide to do, there are many different ways to deal with a lawsuit. If you aren’t sure what to do, consider reaching out to a financial counselor or bankruptcy attorney’s office for a consultation. 

How Does Wage Garnishment Affect My Credit Score?

This is a  tricky question to answer. Credit bureaus typically do not list wage garnishments on their reports. However, if you are at the point of having your wages garnished, it is almost definite that your score will have already been impacted. 

Your wage will not be garnished if you have not already been severely behind on your payments. In fact, most debt collection agencies will not come after you until your account is delinquent. Because of this, your credit score will have already taken a hit. Again, in most cases, wage garnishment is not the thing that lowers your credit score — all the things that lead up to your wage garnishment hurt your credit. 

With that being said, the public record will show that your wage was garnished. This means that anytime you apply for a loan, mortgage, or even go back to court, the wage garnishment may hinder your options. Wage garnishment does impact other areas of your financial life.

How Much Can the Creditor Take LEGALLY?

One of the most important questions may be how much can the creditor garnish you legally?

As such, we scoured the internet for the wage garnishment laws, and but put together the following free wage garnishment calculator to help you understand how much your check could be reduced by.

Is There Something I Can Do To Help My Credit Score? 

If your credit score has been negatively impacted by delinquent accounts, there are some things you can do to help boost the score. Here are just a few of your options: 

Open up a new credit account

This option may be one you consider warily. Remember that an unhealthy relationship with credit is what lowered your score to begin with. However, if you are committed to not letting yourself go into debt that you cannot pay, consider opening a new credit line. 

The easiest way to do this is by going to a store you shop at regularly and opening a card with them. Once you have done this, you can buy the things you would normally buy, but put it on the card instead of from your cash or debit card. This is the most important step: Immediately pay off the card! Since you are only using the credit card to buy things you normally buy — like groceries — you should only be spending what you actually have. Because of this, the best practice is to immediately pay the card off to ensure there are no more missed payments or delinquent accounts. 

Again, you should only consider this if you are sure you can keep yourself on top of any payment you put on the card. 

Become an authorized user

If you want the benefit of a credit card without the risk of falling back into old habits, become an authorized user on a card! Ask a loved one or close friend (that you trust WHOLE-HEARTEDLY) to be put as an authorized user on one of their accounts. As that friend or loved one uses their cards and makes payments, your credit score can benefit. A word of warning: DO NOT become an authorized user for someone that does not have a good financial history. Not only could your credit score take a hit if they miss payments, but you could also potentially become liable for their debt as well. 

Pay your bills on time

This method may take time to bump your score, but it will always positively impact your credit report. Over the years, as you continue to make your payments on time, your credit score will slowly rise. It may take years, but your credit score can return to normal just by paying your bills on time. 


Receiving a wage garnishment can be terrifying. Not getting a full paycheck can make your already tight financial situation even tighter. Seek help from professionals if you need it. They can help you get back to a place of financial stability. Reach out to Ascend for any questions you may still have! We’d love to answer any questions or offer any advice that we can.