For many people, a divorce can be costly – both emotionally and financially. During a divorce, you may feel like you cannot keep up with all of your financial obligations, or that things like your credit score are not as important as other matters. It is very important that you make sure to take care of your credit before, during and after a divorce however, as bad credit scores can impact you in a number of ways for years and years after your divorce.
Why is my credit score important?
We get a lot of questions on why exactly a credit score is important during and after the divorce process – and some people assume that credit scores are only important for people who use credit cards. This couldn’t be further from the truth! Even if you never intend to have a credit card, you still should be interested in maintaining your credit score because employers and landlords increasingly take credit scores into account when making employment or housing decisions, and of course banks and lenders for homes, cars, furniture and other personal property will base your ability to obtain credit, and the interest rate you’re charged, on your credit score.
How can I protect my credit score during a divorce?
There are many things you can do to take care of your credit after a divorce, including:
- Remove your former spouse as an authorized user on any credit accounts you retain after the divorce. This is as simple as calling up the credit card company and requesting that any authorized users be canceled.
- Turn joint accounts into individual accounts. The judge in your divorce decree will divide debt responsibilities, but it is still your responsibility to remove yourself (and/or your ex-spouse) from joint accounts. This can be done by paying off joint accounts and closing them prior to the divorce, or in the case of a home, by refinancing an existing joint mortgage into an individually-owned mortgage.
- Keep up-to-date on any remaining joint accounts, even if your ex-spouse has been ordered to pay the debt. Because your name is still attached to joint accounts, it’s extremely important that you keep tabs on that joint debt, even if you are not responsible for paying it off. If your ex-spouse fails to pay, the delinquency can be reflected on your credit report, and in your credit score. You should contact your divorce attorney immediately if you find that your ex-spouse is not complying with any court orders to pay on joint debts.
If you are contemplating a divorce, in the middle of the divorce process, or dealing with the ramifications of a divorced spouse who won’t play by the rules set up by the court, call us today for a free consultation. With decades of experience, we’ve seen it all – and we’re here to help you.