Your finances play a significant role in your divorce. After all, your income and assets can change significantly following the breakup. You may not know that your credit score can also take a hit during divorce proceedings.
Following a divorce, your credit score is more important than ever. After all, you may need to purchase or rent a new home, lease a vehicle or finance various new expenses. Fortunately, you can protect your credit score throughout the divorce proceedings.
Dissolve your joint credit accounts
Your credit cards do not recognize divorce as absolving one partner from his or her financial obligation. Before the divorce, you should consider closing your joint accounts so you never have to worry about your partner’s spending. While closing the account may temporarily negatively impact your score, you can improve your score by opening a new credit account following the divorce.
If you and your spouse still owe a significant balance on your credit card, you might have to pay it before you close the account. If you do not close the account, who pays the debt may become part of your divorce decree.
Check your credit report
Once you close your accounts, check your credit report to ensure you no longer have those accounts listed. Likewise, look at your report for any linked accounts. Throughout the marriage, you may not track every account that you have. In addition to joint accounts, look for accounts where you or your spouse have authorized users. Remove one another from individual accounts so you cannot charge to each other’s cards.
Try to separate yourself from your partner’s credit as early as possible, especially if your partner has irresponsible habits or might want to drive down your credit score.