3 Ways Divorce Can Negatively Affect Your Credit Score

 Posted on November 08, 2019 in Divorce

It should come as no surprise that a divorce comes with a lot of emotional baggage and worries. During your divorce, your living situation may change, prompting a transitional period as you readapt to your new arrangements and your new, single-income household. You may worry about your children and how they will react to the divorce. In addition to these concerns, you may also need to address your credit score and financial health. Though the act of getting a divorce does not inherently affect your credit score, the way you handle your finances during the divorce can. Here are a few ways in which a divorce can impact your credit score in a less-than-favorable way:

You Did Not Account for the Loss of One Income

One of the most drastic financial changes you will experience during a divorce is the loss of an entire income to your household’s funds. Many people underestimate the impact this can have on their financial health, especially when they have been used to running a household on two incomes for a long time. Budgeting is key when making sure you have enough money to pay for all of your monthly expenses.

Your Ex Will Not Pay for Joint Bills

Creditors do not care about divorce decrees. All they care about is getting their money back. If you and your spouse have joint debts, you will continue to have these joint debts after your divorce is final. Even if your spouse is ordered by the court to repay a certain debt, you and your credit will continue to be tied to that account until the debt is repaid. If your spouse defaults on the payments or refuses to pay, that can negatively affect your credit score.

Your Ex Still Has Access to Your Accounts 

Another way your credit score can suffer during divorce is due to actions taken by your ex on joint accounts. If your ex is particularly vengeful, and they have access to your credit card accounts, they can rack up charges that are tied to your name. This is common with spouses who are authorized users on a credit card rather than joint account holders, because authorized users are not responsible for paying back debts. Be sure to remove your spouse from all of your accounts as soon as possible to avoid any exorbitant charges that could damage your credit score.

Our Will County Divorce Lawyers Can Help

If you are getting a divorce, it is important to think about how it will affect all aspects of your life, including the financial side of things. It can be easy to dwell on the emotional and practical areas of divorce, such as the division of marital property or the allocation of parenting time, and you may neglect to address crucial topics like debt division or spousal support. At Wakenight & Associates, P.C., we know how important proper financial planning is during divorce. Our skilled and knowledgeable Orland Park, IL divorce attorneys can help you make sure you are in good financial shape before your divorce is finalized. To schedule a free consultation, call our office today at 815-727-6144.

Sources:

https://blog.credit.com/2017/12/10-ways-divorce-can-affect-your-credit-180090/

https://www.nerdwallet.com/blog/finance/credit-cards-divorce-hurt-score-joint-accounts-bills-pay/