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Protect Your Credit During a Divorce

Divorce Can Be Damaging to Your Credit

Manage Your CreditDivorce places tremendous stress on everyone. Emotions run high as partners dissolve all aspects of their union, including their financial relationship. When credit card debt and divorce mix, missed or late payments are understandable as the process unfolds. Unfortunately, your creditors will punish you for these mistakes, even if you didn't make them yourself.

Bad credit and divorce don't have to go hand-in-hand. After a divorce, you must take positive action to protect your credit rating. Here are some tips for handling credit cards and divorce that will protect your credit score and help you move forward in your life.

Open your own accounts

Get a personal credit card of your own, and use it responsibly while you're still legally married. An established credit record in your name will limit the damage to your credit rating after divorce. If you don't want to have your own credit card, at least put some of the household bills in your name and keep up with the payments.

If you wait until divorce proceedings to open your own credit card accounts, you'll face a tougher set of credit challenges. A bit of advice: Avoid pre-screened credit offers if you're establishing credit after divorce. Pre-screened offers can compound any credit problems that divorce may cause.

Get a credit report

Get a copy of your credit report as soon as possible. This report is in addition to a joint financial report required for the divorce. A current report of your personal credit gives you a heads-up on changes that might happen to your credit rating after divorce. This knowledge can help you plan payments for credit cards, mortgages, car insurance and other major expenses that are sensitive to your credit rating. Budget according to your projected post-divorce credit situation, and avoid further damage to your credit score.

Close joint accounts

Jointly-held credit cards and divorce can create some thorny problems for both parties. Get together with your ex-spouse, and close down jointly-held credit card accounts. As long as these joint accounts are open, credit companies will take your ex's credit history into account, which can put a bite on your credit score.

Sell joint property

The house, land, and any other real property in the marriage should be sold, and profits should be divided between you and your spouse. If selling isn't an option, a clear transfer of title must take place so that only you or only your spouse will be responsible for the property. Otherwise, financial missteps — like a foreclosure — by either you or your ex-spouse can affect both of your credit ratings.

Save documents

Keep written records of all agreements and financial transactions between you and your ex-spouse. Documenting everything will help settle disputes with your ex and with your creditors, and it will clear the way for you to move on.

 

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