The Effects of Divorce on Your Credit Score
Going through a divorce can be an emotionally and financially challenging time. One aspect that may not be at the forefront of your mind during this process is how it can affect your credit score. Divorce can have a significant impact on your credit score, and it is important to understand how it can happen so that you can take steps to protect your credit.
How Divorce Affects Your Credit Score
Here are a few ways that divorce can affect your credit score:
Joint Accounts: If you have joint accounts with your spouse, such as credit cards or loans, then you are both responsible for the debt. If your spouse fails to make payments on time, it can negatively affect your credit score.
Property Division: If you and your spouse have joint property that has debt attached to it, such as a mortgage, then it will need to be divided in the divorce. If one of you keeps the property but fails to make payments on time, it can negatively affect both of your credit scores.
Divorce Settlements: If you owe your spouse money as part of a divorce settlement, such as alimony or child support, and you fail to make payments on time, it can negatively affect your credit score.
Protecting Your Credit Score During Divorce
Working with a Montgomery divorce lawyer can help you protect your credit score during a divorce. Here are a few steps you can take to protect your credit:
Close Joint Accounts: If possible, close joint accounts and transfer the debt to individual accounts. This will prevent your spouse’s financial behavior from affecting your credit score.
Divide Property Carefully: When dividing joint property, be sure to consider any debt attached to it. If one of you keeps the property, make sure that they are responsible for making payments on time.
Get Everything in Writing: Make sure that all agreements regarding debt and property are in writing. This will help prevent any confusion or misunderstandings down the road.
Monitor Your Credit Report: It is important to monitor your credit report regularly during and after a divorce. This will help you catch any errors or issues and take action to correct them.
Divorce can have a significant impact on your credit score, but there are steps you can take to protect yourself.