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Posted on 11 April 2017 | 2,444 views

Divorce, Your Credit Report and Credit Score

Divorce is all about division – the separation of two people from each other, dividing up property, dividing kids’ time between parents but does divorce have to mean a separation from a good credit score?

When facing the end of a marriage, it’s normal and prudent to think about the impact of divorce on your credit. Divorce ends a marriage, but splitting shared financial responsibilities still needs to be taken care of.

How you managed credit and money while you were married will greatly influence how your credit fares after the divorce. If all your accounts were joint and neither of you maintained individual accounts, your credit history will also be shared. If all the credit was in one partner’s name  – which often happens when one spouse works and the other stays at home – the other spouse will have less credit history after the divorce.

You and your ex will need to work out how to handle joint accounts like mortgages, car loans or joint credit cards. Joint debts impact each person’s credit score equally, regardless of who actually created the debt.

To mitigate the impact of divorce on your credit, you’ll probably need to sever all financial ties with your former spouse. If one spouse is getting the house, utilities should be in his or her name. You may need to refinance mortgages or car loans in order to have a spouse’s name removed from the debt. Or, you may opt to sell property and split the proceeds, which not only eliminates shared debt but helps ensure equitable division of assets.

Hopefully, you didn’t have any joint credit card accounts during your marriage. If you did, you’ll need to work together and with the credit card company to get the debt split fairly into individual accounts.

Finally, when managing divorce and credit, get all agreements and arrangements in writing. That way, you can refer to official records if there are any disagreements down the road.

Divorce will end your marriage, but it doesn’t have to end your good credit score.


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