Divorce may be an emotionally and financially draining process. And one of the most significant impacts that divorce may have on your credit score is through joint accounts. If you shared an account with your ex-spouse, it is likely still listed on both of your credit reports. This could negatively affect your credit scores or be used irresponsibly.
Here are some of the main factors that may affect your credit after a divorce include:
- Settling joint debts: This might involve splitting up loans or other obligations, resulting in one spouse becoming responsible for the entire debt. If you’re the spouse responsible for the debt, make sure you keep up with payments to avoid any damage to your credit score.
- Closing joint accounts: Once you close a joint statement, it will no longer be reported on your credit report. This could lead to a drop in your credit score if it were a positive account.
- Establishing new accounts: You may need to open new accounts in your name involving taking on debt. This may cause a short drop in your credit score.
- Changing your name: This will likely require you to change your name on your credit accounts. Once you do this, the version will be reported in your new name and won’t impact your ex-spouse’s credit score.
There are steps you can take to help protect your credit score during and after a divorce, such as:
- Work with your spouse to ensure that any joint accounts are closed and settled responsibly.
- Avoid opening new credit accounts or taking on debt unless necessary.
- Consider contacting a credit counselor for guidance on safeguarding your credit throughout this transition, improving your score once the divorce is finalized, and building your score after the divorce is final.
If you’re going through a divorce, it’s essential to be aware of its effect on your credit score. By taking steps to protect your rating, you can help ensure that you maintain a good credit history. Ask help from professionals. The Oasis Firm can give you sound advice on what to do should you find yourself in this situation.