How Divorce Can Affect Your Credit Score
You may have heard that divorce can affect your credit score, but how? Do the credit bureaus hear you’re getting a divorce and automatically ding you? Not exactly.
Your marital status is not listed on your credit report, so a divorce does not automatically lower your credit score. However, the actions involved in a divorce indirectly affect your credit. This mainly happens because you are splitting assets. This may leave you with less money to pay bills. Or maybe your spouse wants the house and promises to make the mortgage payments but never does. This can affect you if you’re still listed on the loan.
If you’re a woman, you’ll want to take note. Women tend to suffer more financially in a divorce because they earn less than men in general. Plus, women aren’t always savvy when it comes to finances. They may not understand credit scores in general.
The Harm of Joint Accounts
If you have joint accounts, you’ll need to deal with them during the divorce. If you want to keep them, you’ll want to remove your spouse’s name from them. Otherwise, close them. In any case, you’ll want to remove your name from them. It doesn’t matter what your divorce decree might say or an oral agreement you had with your spouse. If your name is on the loan, you’re liable for paying it.
You need to be careful because vindictive behavior by a spouse can certainly wreck your credit. If your spouse is out to get revenge on you, it can hurt you. Some examples include making large purchases on credit cards or intentionally paying credit cards late or not at all. But this type of behavior affects your spouse as well because their credit score will also be affected.
Protecting Your Credit
Ruining your credit score can haunt you for a long time. Your score can drop quickly, but bringing it back up can take a long time. As you start a new chapter in your life, you’ll need good credit to maintain your lifestyle. Here are some tips to help you improve your credit after a divorce:
- Be civil. Instead of seeking revenge, divorce amicably. Work with your spouse to pay off debt on joint accounts.
- Double-check the users. Your spouse may be a user on your accounts. Be sure to check with your lender and if so, remove your spouse so they can’t rack up charges.
- Check your credit report. You are entitled to receive a free credit report every year from each credit bureau (Experian, Transunion, and Equifax). You can ensure there are no surprises, like an account you never opened.
Seek Legal Help
Divorce greatly impacts finances, so it’s possible that your credit score can be affected as well. Take the step to protect your credit so you can buy a house, car, or other purchases after a divorce.
Fort Lauderdale divorce lawyer Edward J. Jennings, P.A. can help you with your finances so you can be in the best position possible to move on after a divorce. Schedule a consultation today by filling out the online form or calling 954-764-4330.