Does A Divorce Impact Your Credit?
The short, straightforward answer is no. Divorce proceedings do not directly impact your credit score or your credit report directly. But what can happen is you may see an indirect impact. How does this happen? Let’s take a look.
Understanding divorce & credit reporting
Your marital status doesn’t hold any weight when it comes to your credit report. So just by changing your marital status, you will not see any change in your credit. But joint accounts will still appear on your credit report. So if you are listed on an account in any way, such as a joint owner, cosigner, or authorized user, you’ll want to make sure you take care of those accounts prior to your divorce.
You will likely want to close the account completely. If you can’t close the account, you’ll want to ensure that your name or your ex-spouse’s name is removed from the account in totality. If the account stays open, and both of your names are still linked to the account, you both remain legally responsible for the account. This means your ex-partner can technically impact your credit by how they choose to behave in regard to that account.
Ways to protect your credit in a divorce
There are a few ways you can ensure that your credit remains protected as you go through your divorce.
If it’s feasible, try to maintain a cordial and civil relationship with your ex-partner during the proceedings. While emotions may be running high, try to avoid blame and vindictiveness. This will allow you both to make clear-headed, respectful decisions that will ultimately protect your credit health.
Double and triple-check all of your accounts. You may think that an account is in your name only, but even still, check it.
If it is not possible to pay off and close a joint account completely prior to the divorce, convert the account to an individual account. The creditor will be able to share the options available to you for each lender.
Ultimately, the most important thing is to ensure that all payments are made on time for personal and joint accounts to preserve your credit. Until your name is removed from an account entirely, you are still legally and financially responsible for it. So bear that in mind.
Keep an eye on your credit reports. This will be key to ensuring that everything has gone to plan. If something pops up on your credit report that you are unsure about, you’ll be able to take swift action to establish a plan.