Can Divorce Impact My Credit Score?
If you are thinking about ending your marriage and filing for a divorce, you have probably weighed all of the issues. Indeed, there is no doubt you have thought endlessly about the effect of getting a divorce on your personal and psychological wellbeing, your friends and family, your children, and even your finances. But what you may not have thought about, or at least may not know the answer to, is how divorce can affect your credit score. The following considers the impact that parting ways with your spouse can have on your credit health, as well as some things you can do to mitigate the worst of the consequences.
The Impact that Getting Divorced Can Have on Your Credit Score
When you’re married, finances, bank accounts, credit cards, loans, debts, and more are all linked. In fact, even if you’re not actually listed on your spouse’s account or credit card, many debts (and assets) are shared and considered joint by marriage. That means that parting ways can eliminate income or assets, or even marital debt. Consider these major ways in which divorce may influence your credit score:
- Loss of income may mean you’re unable to pay your debt. If you divorce and lose out on your spouse’s income because of that divorce, you may have trouble paying debt you owe. This debt may be incurred during the divorce process (such as lawyers’ fees), or after divorce, as you’re accommodating to a new standard of living.
- Joint bills go unpaid. Another problem can be in the event that joint bills where both your name and the name of your spouse are listed go unpaid. For example, consider a car that your spouse purchased three years ago. At the time of purchase, both of your names were on the car loan, but your spouse was responsible for making payments every month. Now that the divorce has been initiated (or been finalized), your spouse has stopped making payments on the car, but your name is still listed on the loan. As such, your credit score may be affected.
- Your ex starts racking up debt. Another issue could be that of your ex-spouse having access to your credit cards, and using those cards to make purchases. If you forget to remove your spouse’s name from any of your accounts, this is a possible repercussion.
How You Can Protect Your Credit Score During Divorce
Fortunately, most of the issues above are completely preventable, and there are several steps you can take that can protect your credit score during divorce. These include to:
- Create a budget for yourself according to your financial situation, both during and after the divorce is finalized – be sure to factor in costs like moving, lawyers’ fees, counseling, cost of separate housing, etc.;
- Be upfront about your finances during the divorce process, and don’t be afraid to ask for spousal support if you’re eligible for it and need it;
- Review your finances, assets, and debts – do you know what you will be liable for when you divorce?;
- If there’s a joint debt that you need to ensure your spouse pays to protect your credit, consider seeking a court order requiring the payments to be made timely and in full;
- Change bank account and credit card names and access (online usernames and passwords) to ensure you’re the only one who has access to your accounts.
Work with a South Carolina Divorce Lawyer
One way you can protect your financial situation when you are getting a divorce is to work with an experienced South Carolina divorce lawyer who will fight for a fair property division settlement, and a fair spousal maintenance award if appropriate. A knowledgeable attorney can also advise you regarding divorce and your finances, and provide you with more information about how divorce may affect your credit, taxes, and more.
At The Cate Law Firm, P.A., our South Carolina divorce attorneys are ready to meet with you. You can get in touch with our legal team to schedule a consultation by calling 864-585-4226, by visiting our office in person, or by sending us a message telling us a little bit more about your case using the online form on our website.