Will Divorce Impact Your Credit Score?

Will Divorce Impact Your Credit Score
David Andrew
By: David Andrew
Updated: March 7, 2016
Experts share their tips and advice on BadCredit.org, with the goal of helping subprime consumers. Our articles follow strict editorial guidelines.

When you are going through a divorce, you need to protect yourself financially. If you do not plan right, there are a few problems that can haunt you long after you complete your divorce.

One item you need to protect is your credit score. While the divorce itself will not impact your credit score, the actions of your ex-spouse could damage your score even after everything is finalized.

Divorce proceedings

Divorce proceedings are a legal process to end the marriage with your spouse. Part of this process will be to divide your shared assets and liabilities.

This will determine who gets to keep which assets, such as the house. This will also determine who will be responsible to pay off certain debts, like a joint loan.

None of these moves have any impact on your credit score.

Shared accounts

As you go through your divorce, you need to be very careful to keep track of any joint accounts. These are loans or credit accounts held in both your name and the name of your ex-spouse.

You are just as reliable for these payments after your divorce and this is where you can get into trouble. If your ex-spouse is in charge of paying off one of your joint loans and starts missing payments, it will drag down your credit score.

The same applies if you co-signed a loan for your ex-spouse. You are just as responsible for these payments. That is the risk of co-signing a loan.

“Don’t make things harder for

yourself by damaging your credit.”

Protecting yourself

The best way to keep a divorce from hurting your credit score is to remove any risk of damage from a shared account. Be sure to close all joint credit cards and lines of credit as soon as divorce looks likely so your ex-spouse never has the chance to run up these accounts.

If you hold any shared loans and are worried your ex-spouse will not be reliable for payments, you can try negotiating to take over these debts yourself in exchange for getting more assets.

You will be able to make all the payments and will not have to worry about your ex-spouse’s financial behavior.

Going through a divorce is never easy. Do not make things harder for yourself by allowing the process to damage your credit. Use this advice and you will make it out of your divorce with the same strong credit score.

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