How Does Divorce Affect Your Credit Score

Written on Saturday June 9, 2018 by Bob Hinrichs

Divorce and credit score

Going through divorce is emotionally taxing and life-altering. And it can have a great impact on the couple’s financial situation. In all the stress, your finances may be the last thing you want to think about. But it’s smart to get them figured out ASAP!

Divorce itself has no bearing on credit score as marital status is not a factor in its determination. It’s what unfolds throughout the separation can negatively impact your ratings. Today, we’re going to walk through how divorce can impact your credit score and what you can do to protect yourself.

Credit Score 101:

Your credit score is the way in which lenders and landlords decide whether or not to work with you. They approve you for mortgages, auto loans, credit cards, rental housing, etc. If you want to read more about how credit is measured, click on this article by The long and short of it is that it’s important to have good credit!!

Divorce leads to major life and habit changes, and you have to start the rebuilding process from somewhere. Having good credit can be vital to get back on your feet independently. As we mentioned before, the change of marital status from married to single does not impact your credit score. However, all the accounts you created during marriage can affect things. Think of your credit cards, car loans, and home loans. Yes, they are being measured! In this article, we’ll dive into credit relating to divorce, but for more info credit relating to credit cards, check out Lend Edu

How Can Divorce Affect My Credit Score?

There are a various ways divorce can impact either party’s credit, but we will use this article to walk through the most common and how you can best protect yourself. Before we dive in, it’s important to clarify just because a judge declares one person responsible for an account or bill, it does not mean you are separated from that responsibility completely. The eyes of the law and the eyes of the ‘credit gods’ aren’t the same. 

Your credit may be impacted through a change in your financial situation.

  • Dropping from two sources of income to only one (or from one primary household income to no income as an individual) can create transitional challenges. It may be more difficult to pay bills and you could find yourself relying more heavily on credit cards. When you take on more debt in relation to your income, your credit score can drop. On the flip side, even if you aren’t taking on more debt from credit cards, you may be missing payments or getting behind. In either case, your credit score will drop.

Another way your credit may be impacted is if your ex becomes bitter or forgetful.

  • It doesn’t matter if they don’t care about their credit score or they are just bad at remembering to pay their bills. Missing payments can affect you too. If you have a joint account, missing a payment will affect both of your credit scores. Even if a judge rules that your ex-spouse is responsible for a certain bill, if it is a joint account in the eyes of your lender then it’ll jointly affect your credit score. The same thing can happen even if bills are delegated in a written divorce agreement. At the end of the day, if you have joint accounts, you are BOTH financially responsible.

What Should I Do?

The best move is taking action you know the divorce will happen. Open your credit report, go through all of the accounts listed on the report and check which ones are joint. Once you have a list compiled, call each of the lenders and transition your accounts to individual accounts appropriately.

In some cases, this may not be possible. If that is the case, ask the lender to send you monthly statements so you can see whether or not the bill is being paid by your spouse. Even if you ex isn’t out for revenge and simply can’t cover the payment that month, your credit can still be impacted. Actually, covering the bill for your ex might be a better solution than letting your credit get damaged. If you find yourself covering the bills often, it may be worth revisiting court to reclaim the money you’ve paid.

What Could Happen if I Do Nothing?

If you have any accounts where your ex is an authorized user – no matter how amicable your relationship seems at the time – it’s advised that you remove them as a user before they’re able to do any damage. If you fail to remove them, it may result in charges you can’t afford to pay off, which will negatively impact your credit.

  • Example: If you have a vengeful ex with access to any of your accounts as an authorized user, they can pile up as much debt as possible on your account without suffering any consequences. Authorized users don’t carry responsibility for repayment. The account holder does!

We hope this has provided some insight and action steps to prevent damage to you credit score during an already difficult time. Please remember, this content was created solely for informational purposes and should not be used as legal advice. If you are seeking legal advice, it’s best to find a licensed professional in your area.


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