How Divorce Can Affect Your Credit Score
When a court issues a Judgement of Divorce, the marriage is legally terminated. However, the same cannot be said for debts accumulated during that marriage. The financial agreements made with creditors during your marriage cannot be dismissed. The following tips are here to use as a general guideline, but discussing your options with your Divorce Attorney and then a financial planner will give you the best possible chance to protect your credit rating after the divorce is final.
- Credit Card debt incurred in both yours and your spouses name during the marriage must be paid back. Ensuring that no more debt is incurred after the decision to divorce has been made is important. Call your credit card companies and cancel the cards. Either debtor can cancel a joint credit card account without approval from the other. You can then apply for credit in your name only.
- Make certain all bills are being paid. The divorce process can take months and all it takes is a few late payments to hurt your credit. If your spouse is responsible for paying the bills, check each month to make sure it’s really being paid. If jointly incurred bills are being paid late or not at all, go ahead and make the minimum payment and discuss your options with an experienced divorce attorney.
- Notify your creditors of your divorce. In addition to notifying the proper collectors, you should write a letter to them as well. That will help them to expedite their file updates.
- Check Your Credit Score. This is something you should do periodically, but it is especially important after major life events. Keeping track of your credit score will allow you to see if your credit has been adversely affected by your divorce. It will also tell you if any debts your former spouse is responsible for are being neglected.
- Abide by the Court Order. One common mistake recently divorced people make is to forget to do the things their divorce court order requires. Read and understand the Divorce Decree with your attorney. If you have any questions, make certain you understand the answers. You may have a Qualified Domestic Relations Order that you must follow through on. Perhaps you must close a checking account, or even sign a quitclaim deed for your property. The same goes for your former spouse. If he or she is under obligation to do something by a specific date, make certain it is done.