protecting credit score divorce

Protecting Your Credit Score During Divorce

Goldberg Jones Divorce, Finances Leave a Comment

Finances after a divorce are just as important as finances during a relationship. Ending a marriage has a huge impact on this area. One thing people often fail to consider, however, is how it affects your credit and your credit score. But it’s vital to take steps to protect your credit and economic interests moving forward.

As you begin the divorce process, take the time to investigate and assess your credit. While divorce doesn’t directly impact your credit score, the action you take now definitely will. As you separate, you and you and your spouse will likely have an overlap period where you both have access to shared money. Make sure to keep a careful eye on any joint accounts or debts.

Related Reading: Personal Injury Settlements in Divorce

4 Steps to Protect My Credit Score

A recent article from financial experts compiled four helpful steps to protect your credit during a divorce. These measures help guard against sudden drops in your score, your ex racking up secret debt, or surprise unpaid bills on shared accounts.  

1. Examine Your Credit Report

You should become familiar with your credit. This means knowing exactly what accounts link to your credit score. It’s important to know what connects to your spouse and what you have on your own.

Throughout years of marriage, it’s easy to forget about accounts, or not know how they affect your standing. The easiest way to correct this is to pull credit reports from all three credit bureaus, Experian, Equifax, and TransUnion. This helps you differentiate between personal and joint accounts.  

Note all authorized users on joint accounts. Authorized users can be removed to cut off their access. Taking someone off an account is often fairly easy. This also means your ex’s spending no longer reflects on your credit score.

Related Reading: Life Insurance and Divorce: What You Need to Know

2. Split Joint Accounts ASAP

If spouses hold joint accounts on any credit cards, any missed, late, or non-payments adversely affect both parties’ credit. Closing out all shared accounts rather than splitting who is responsible for each is usually the best idea. If you decide your ex pays a certain card, missed payment still impacts you if you remain on the bill.

If you can, work on separating accounts early on in the process. Things often get tense as divorces continue. It may be easier to agree to close accounts, split earned rewards, and the like before things become testy.

Closing accounts does cause a dip in credit score. However, this is usually only temporary and should bounce back once you open new accounts. It’s also key to be consistent and on-time with payments. This helps ensure your credit score remains as strong as possible.

Related Reading: How the Court Treats Debt in Divorce

3. Contact Your Creditors  

Another step: contact your creditors to let them know of your change in marital status.

Before closing joint accounts, credit card companies require you to pay off any remaining balance. If you owe nothing, you and your ex can simply close the account. If you still owe, you may have to discuss payment plans, refinancing a debt into one person’s name, or transferring the balance to an individual account. You and your ex may be able to agree to sell off an asset in order to pay what you owe. 

Whatever system you work out, it’s best to get the terms in writing.

Related Reading: They Left, Do I Have to Pay All the Bills?

4. Freeze Your Credit

Freezing your credit is an extreme step, but one that might be necessary to protect your credit score. Especially if you have concerns about your spouse opening new accounts in your name without your consent.

Freezing credit simply means no one can open new lines of credit in your name, not even you. It’s free and all you need to do is contact the three credit bureaus. You can freeze your credit for a specific amount of time or indefinitely.

Related Reading: The Average Cost of Divorce in Washington

Talk to An Attorney 

Whether you are contemplating divorce, in the middle of one, or just got the ball rolling, be preemptive and talk with an attorney. The best way to ensure you are doing everything you can to protect your credit score and finances is to speak with an expert. 

Related Reading: How Does Washington State Divide Property?

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