How Divorce Can Affect Your Credit Score

While the actual act of getting a divorce does not affect a party's credit score, there are residual effects that can greatly impact credit scores. When a couple gets divorced, their liabilities are allocated. It is important to remember that your payment history and level of debt are the two biggest factors that will affect your credit score. Maintaining a good on-time payment history and minimizing your debt both during and after the divorce are essential aspects of keeping your credit score in good standing. In this blog, we explain the different ways that divorce can impact your credit score.

What Happens to Joint Debt During a Divorce?

When a couple gets divorced, their liabilities are allocated. This means that one person might take over one credit card, while the other spouse takes over another one. While one person may become responsible for the payments of a joint credit card, the original credit card agreement may remain in both parties' names. If this occurs, and there is non-payment, it will likely affect both parties' credit scores, despite who is responsible for the payments pursuant to the Judgment of Divorce. In addition to allocating your different accounts, the expenses accumulated from your legal expenses can also have a significant effect on your credit rating.

Similarly, if both parties names are listed on a mortgage, but one party is keeping the house and becomes responsible for the mortgage, it is imperative that they actually make the mortgage payments and refinance the property to remove the other person's name. If they do not, despite the Judgment of Divorce, both parties' credit ratings will be affected.

Additionally, if a party is ordered to pay child support and spousal support, and does not, then the recipient may request to the Court that a judgment be entered against the payor. If a judgment is entered, then it will likely be reported to the payor's credit report. It is imperative that all payments required to be made in the Judgment of Divorce actually be made, as failure to do so can have long-lasting effects on not only the payor but both parties.

How To Protect Your Finances

You will need to sever your financial ties to your spouse once you realize you will be getting divorced. You should review your credit report and recent billing statements to make a list of all the accounts that are jointly held between you and your spouse. Make sure you close your joint accounts in writing and by phone, also ask the creditor not to re-open your joint accounts. You will also need to remove your spouse from the list of authorized users on your accounts to ensure that they don’t run up a negative balance.

Don’t trust your spouse to continue to make payments on accounts that are in your name. In fact, if these bills don’t get paid and they’re in your name, your credit will end up suffering. Remember, whoever’s name is on the account will have to deal with the subsequent credit issues. To get the debt organized into each spouse’s name, you might need to refinance loans and transfer credit card balances to another credit account. If you and your spouse can’t reach an agreement on organizing each other’s debt, you should consult with an attorney to help mediate your dispute.

While you are negotiating an agreement with your spouse, keep up with at least the minimum payments on the accounts that will affect your credit score. If your spouse is responsible for making payments on accounts in your name, make sure to keep track of the due dates and check for payment as the due date approaches. You can also ask the judge for repayment from your spouse if you are making payments your spouse is responsible for.


Do you have more questions about how divorce can affect your credit score? Contact our attorneys to set up a free consultation today.


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