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how does divorce affect credit

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3 Things to keep in mind to protect your credit score during divorce


Divorce is a time of tremendous upheaval — personal, emotional, and everything in between.

And yet, while you seek to regain a semblance of peace in your life, you’re faced with an additional challenge: protecting your financial health and overall credit score.

Though it may not seem important right now, your credit is a vital tool that you’ll need to establish financial independence down the line.

And while divorce doesn’t directly affect your credit score, the ripple effects from separation can wreak havoc on it.

In fact, according to a study, nearly 38% of Americans reported seeing their credit score drop by over 50 points after going through a divorce.

As you walk through this challenging time, keep these three tips in mind to protect your credit.

1. Get a copy of your credit report (and identify shared accounts)

In order to protect your credit, you first need to identify what accounts are linked to it.

And in order to do that, you need to get a copy of your credit report.

Simply go to AnnualCreditReport.com to get started.

It’s free, fast, and easy. Federal law entitles you to one free annual credit report every 12 months from each of the three credit bureaus, Experian, Equifax, and TransUnion. But through the pandemic, everybody in the United States can receive a free credit report each week from each of those credit bureaus. Plus, they can receive six free credit reports per year through 2026 by going to Equifax website or by calling 1-866-349-5191.

Be sure to review a report from all three bureaus, as there may be slight discrepancies on each.

Once you receive your credit report(s), carefully review them and take note of any joint accounts — the ones in which you and your spouse share liability.

As you’re gathering information, double check if your spouse was added as an authorized user on any of your credit cards. If you intend to remove your spouse as an authorized user from your accounts, simply call your credit card issuer to request a change.

You should also consider removing yourself as an authorized user from your spouse’s credit cards. If you neglect to do so, any late payments made by your spouse could negatively affect your credit score.

2. Separate and close all joint accounts

While divorce doesn’t directly affect credit, it also doesn’t relieve spouses of financial responsibility in a joint contract.

Since shared accounts are held by you and your spouse, you will both remain equally responsible for outstanding debts after your divorce is finalized.

That’s why it’s vitally important for both parties to separate and close joint accounts as soon as possible.

It’s the only way you can regain control of your credit and financial future.

Note: While many banks allow one individual to close a joint account, some institutions may require both spouses to consent. Be sure to know the facts for your specific situation before you attempt to close an account or speak with your spouse about doing so.

3. Inform your creditors about your divorce

After you’ve closed your joint accounts, it’s important to take further action to protect your financial future and credit score.

Consider the following steps to complete the process:

  • Send a signed, dated, and certified letter to your lenders asking them to provide you with an up-to-date account statement.

  • In your letter, politely inform them that you do not intend to be held responsible for any debts incurred after the date posted on the letter.

  • Then, request that they put the account on “inactive” status, thus preventing any additional charges from accumulating.

  • Finally, ask them to officially close the account(s) once the outstanding balance is paid in full.

We also recommend requesting your lenders to send you hard copies of your monthly statement (both for accounts with outstanding balances and for accounts you intend to keep open).

This is the best way to monitor your accounts, to check that debts are being paid on time, and to ensure no new charges are accruing.

Moving Forward

Ultimately, this process is about positioning you for the next chapter of your life.

However turbulent and emotional these moments may be, remember that you need to look out for yourself and your future.

You’re rebuilding your life, however slow it may seem.

To that end, you need to do all the little things right, like paying your credit card bills on time.

Don’t forget that 35% of your FICO® credit score is based on your payment history.

Not only that, but 30% of your total credit score is based on how much you’re borrowing. When you borrow too much and get “overextended”, your credit score drops.

Ultimately, it’s pretty simple: borrow what you need and pay your bills on time. If you can make a habit out of that, you’ll be in a good place.

You’re going to want to have good credit on the other side of this. After all, credit is the financial tool that leads to freedom.

Hang in there. You’re on the right track.

Welcome to First Phase: where less-than-perfect is more than enough.


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