Can divorce affect your credit score? A lot of cardholders face low credit score after divorce. Do not be quick to conclude that the credit card damage is simply because of divorce. Marital status is not a factor for deciding credit score or part of credit report. You may wonder, how then does divorce affect your credit score? With this article, you will learn how to keep your credit score during and after divorce.
Can Divorce Affect Your Credit Score? How Divorce Could Affect Your Credit
Whenever a divorce occurs, it indirectly leads to financial difficulties that badly affects one’s credit. Because resources are no longer merged to solve financial problems, you may have late payments on your credit cards, loans, and other bills. These eventually become part of your credit history and leads to bad credit.
What about the joint account you people had as a couple? If the account was not closed before the divorce and payments are not made to it when due. The two of you will experience bad credit due to debt accumulation.
Can Divorce Affect Your Credit Score? What Can You Do?
The most important factors affecting your credit score are;
- Payment history
- Debt level
Ensure that you avoid debt by making all your payments. Make your payments promptly whether divorced or not. To avoid having a bad credit after divorce, do the followings.
- Spend within your budget. Let your budget be within your income limit. Create a scale of preference, spend only on them and ensure to pay in full each month. Ensure to pay when due. Even if you have an alimony and child support, keep that aside. In certain situations, your ex-spouse may not meet up to them. He may lose his job or encounter any challenge. Prepare your mind in case the child support and alimony does not come.
- Close all joint accounts after divorce. Do this in writing and by phone for extra protection. Do not for any reason re-open the accounts.
- To avoid implicating your ex-spouse, remove his or her name from any credit card you still use. Am sure you do not want them to pay for purchases they did not make.
You Can As Well
- Ensure to get the debts owe in your own name. Refinance the loans and transfer the credit card balances to another credit card. Involve the attorneys to get this done fast. While you wait, make at least the minimum payments on the accounts. This will save your credit score.
- Do not completely depend on your ex to make payments on accounts that have your name on them. This includes mortgages and car loans, even if your spouse is still living in the house or driving the car. Be responsible for the bills in your name.
- Adapt to your new lifestyle. Divorce can be very hard, especially when you have a low income. If you can no longer afford certain things, learn how to do without them. As for your auto loan payments, refinance the loan or sell the vehicle and buy a less expensive one. Cut out certain expenses that you do not really need.