High Caliber Legal Service

Can a divorce damage your credit score?

On Behalf of | Sep 1, 2022 | Family Law |

When you first make the decision to pull the plug on your marriage, you probably have a million things running through your mind. How will this decision impact the time you get to spend with your kids? How much will you have to pay in alimony? Who will get to keep the house?

One thing that probably isn’t at the top of your to-do list is taking immediate steps to protect your financial future. However, neglecting this area can prove to be a costly mistake. Here are three protective measures to take as soon as possible:

Close out joint accounts

When divorce is on the table, things can get ugly between you and your spouse quickly. An angry ex can do a lot of damage if you share any banking accounts or lines of credit together. If your ex goes on a revenge shopping spree, for example, you could share liability for any debt they accrue – which can hurt your credit score. To avoid this, it’s wise to close out any shared accounts as soon as you’ve made the decision to divorce.

Open individual accounts

Your next step is to open up new accounts for banking and credit cards in your name only. Doing this while you’re still married can be advantageous – especially if there is a significant income discrepancy between you and your ex. Applying for a new credit card while you’re still technically married allows you to claim your spouse’s income as part of the household income – which will likely get you approved for a higher spending limit.

Send letters to your creditors

Your creditors probably weren’t at the top of the list of people you intended to notify of your divorce. However, taking proactive steps to officially notify them can benefit you in the long run. Send them a letter by certified mail stating that you are divorcing and that you will not accept any liability for debts accrued after the letter’s date. Ask them to send you a current account statement, and instruct them to cancel your account as soon as the outstanding balance has been paid.

Monitor your credit

Get a copy of your credit report, and check it regularly for irregularities – including accounts you may not have realized you had. If you suspect your ex may have vengeful tendencies, you may want to sign up for a credit monitoring service. You may also want to set up a credit freeze or fraud alert on your accounts. This can help to flag any suspicious activity – such as your ex using your Social Security Number to open a new account in your name.

There are myriad factors to consider when navigating a divorce. An experienced family law attorney can help guide you through the process to ensure you are protected and set up for a bright future.

Share This