Will My Credit Score Be Affected If I Get Divorced?

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Divorce is an emotional and difficult process to have to go through. The difficulty can be compounded based on the number of years that you have been together with your spouse, whether you have any children with your spouse, and the dollar amount of your acquired assets.

One question that divorcing couples often have in their minds is “Will my credit score be affected if I get divorced?” The following few paragraphs will explore the different ways that divorce can affect your credit score and what you can do about it. If you have further questions you can contact a divorce attorney Dublin Ohio.

How Can Divorce Affect Your Credit Score?

Divorce can have an impact on your credit, although it is usually not due to the proceedings themselves. Couples should therefore not expect their credit scores to plummet once they file for divorce. After all, your marital status is not factored into your credit score and not included in your credit report. However, some things that happen during divorce can affect your credit negatively. They include:

  1. Moving from Two Incomes to Just One

It is always possible to examine both of your finances before divorcing to determine new budgets to avoid falling behind on any payments or bills. Divorced individuals often report that losing their spouse’s income had the single greatest impact on their financial lives. Fortunately, you can easily avoid this issue by setting up a new budget early enough.

  1. Uneven Splitting of Debt

One party may get more of the property, income, and assets, as well as more of the debt when assets are divided during a divorce. It all depends on how the debt was divided, but it is still enough to affect your credit score.

  1. Lower Credit Limits

Creditors often check up on clients to find out whether there has been a change in salary and most credit card agreements allow creditors to lower limits at their discretion. If one of the spouses was earning more than the other and the accounts are separate, the credit card company may decide to lower limits for either one or both spouses, which may affect credit scores.

  1. Spouses Failing to Work Together

Bills sometimes go unpaid or are overlooked. Keeping the divorce amicable helps the parties to communicate effectively with each other over the shared financial responsibilities even after the households are separated completed. Working together ensures that the credit of both parties remains in good standing.

  1. Confusion Over the Divorce Decree

Divorcing couples are often confused about their financial responsibilities as stipulated in the divorce decree. If you are not sure about what you are required to pay or where you stand, consult a mediator, court facilitator, or your lawyer.

  1. One Party Still Retains Access to Accounts Belonging to the Other Party

If divorcing spouses fail to split their joint accounts, they will both be held responsible for any extra charges incurred. It is always advisable to split any joint accounts that you have with your ex as quickly as possible.

  1. Failure to Disclose All Debt During Divorce Proceedings

Both parties in the divorce are required to disclose their financial accounts at some point during the divorce process. However, not all people are truthful about their assets. The best way to ensure that you are aware of all accounts bearing your name is to run a credit report.

How Can You Protect Your Credit During a Divorce?

If you are going through the process of divorce, it is quite easy to ignore your credit. After all, divorce just brings grief and stress into your life. You might feel as though you don’t have the energy to worry about one additional problem in the midst of the pressure that you are facing.

However, ignoring your credit during divorce can have disastrous consequences. While the divorce process itself might not affect your credit rating directly, some things associated with divorce actually do as clearly shown above. It is thus important to protect your credit by doing the following:

  1. Checking Your Credit Report

You should check your credit report even before the divorce has been finalized. It can be easily done by contacting the 3 major credit bureaus i.e. Experian, Equifax, and TransUnion. If you do this, both you and your soon-to-be ex can view your complete credit history and identify joint and individual debts.

  1. Separate Your Accounts

All joint accounts should be separated and all joint debts where you are not the primary borrower but rather a cosigner should be separated as much as possible. However, you will need the lender’s consent for this.

  1. Remove Your Spouse from the List of Authorized Users

If you have some accounts, such as credit cards that are not joint but where your spouse is an authorized user, remove your spouse’s authorization. It is also advisable to get yourself removed as an authorized user on accounts belonging to your soon-to-be ex.

  1. Freeze Your Credit

If you are in an amicable divorce, freezing your credit might not be necessary, but if things do get nasty, you should consider it. Since your ex-spouse probably has access to your Social Security Number and other critical information, he/she might illegally take out credit in your name.

  1. Budget for Your New Situation

Take stock of your new financial situation soon after your divorce is finalized. Recently divorced people often have problems adjusting to the new single-income standard of living. You can find the adjustment quite hard if your ex was the primary breadwinner. To avoid falling behind on bills and ruining your credit score, you need to learn to live within your means.

Divorce can be a particularly difficult time, but you still need to take care of yourself both emotionally and physically. However, you should also not forget to look after yourself financially too. The stability of your financial future might depend on the choices that you make right now.

Divorce does not affect your credit score directly but the things that happen during divorce can. So, follow the tips provided here to ensure that your credit score is not affected by your divorce.