When you go through a divorce, you probably know you’ll have to divide up your assets, but you may not have thought about the fact that you’ll also have to sort out your debt. Even though you might agree with each other on how your debt should be divided, your creditors may not look at things the same way.
You’re still liable for any loans or credit cards you’ve signed for. Even if you and your ex have agreed about who’s responsible for what, you can’t just assume your ex is taking care of what they said they’d take care of. As long as your name is on the account, missed payments can still harm your credit.
How Divorce Might Affect Your Credit
If you’re asking yourself the question, “what happens to my credit when I get divorced?” the simple answer is that it doesn’t automatically hurt your credit, since your credit report doesn’t list your marital status. Depending on your situation though, there are some aspects of credit that could be impacted such as:
- The age of your accounts and credit mix may decrease
- Your credit utilization may go up
- Your ex may not pay the bills they agreed to pay on time or at all because they’re not as concerned with credit as you are
If you and your spouse didn’t split up on good terms, your ex could continue to rack up debt on joint accounts. It’s a good idea to close joint accounts altogether if possible or make sure access to credit on joint accounts is turned off. Double-check that your ex isn’t an authorized user on accounts that are just in your name.
Divorce Can Affect Your Income
After your divorce, your income may decrease now that there’s only one paycheck to cover your bills. On top of reduced income to cover your monthly expenses, you may also have attorney bills related to the divorce.
Reduced income can make it more difficult to pay bills on time. When trying to deal with the crisis at hand, you may be tempted to rely on credit cards to try to make ends meet. However, high credit utilization which is usually considered anything over 30 percent utilization can cause your credit score to go down and limit your financial options.
Watch Your Credit Report
It’s not unusual to find errors on your credit report after a divorce, so it’s more important than ever to carefully monitor your credit report and dispute any inaccuracies with the credit bureau. Debts that should be only in your spouse’s name may appear on your credit report, and if you find them, make sure they’re removed.
Dovly can help you with this process. Our automated credit repair engine can find errors on your credit report and can manage and fix your credit while you sit back and relax. As we successfully remove inaccurate negative items, you can watch your credit score increase in less time than you think. Don’t let misinformation drive your score down. Let Dovly help you get started today.