How Does A Divorce Damage Your Credit Score?
If your marriage is over, you have a lot to think about. You may be worried that you will lose valuable assets, such as the marital home or your own business. If you have children, you are likely also wondering how much you will be able to see them post-divorce.
There is no doubt you are going through a turbulent time and that may cause certain things to get overlooked. One of the things many people do not consider is how a divorce will affect their credit score. It is not until much later that people realize their credit score has taken a hit ever since the divorce was final. If this happens to you, it may prevent you from obtaining a loan or additional credit. Fortunately, there are ways to minimize the negative impact.
How Does a Divorce Affect Your Credit Score?
According to a study conducted by Experian, one of the major credit reporting bureaus, women are more likely to feel the strain of financial issues during divorce than men. Of all respondents, 54 percent of women stated that their credit score dropped during their divorce. Fifty percent of women also stated that their former spouse ruined their credit. The difference between men and women is largely due to the wage gap that still exists.
The credit bureaus do not take a divorce into consideration when calculating a person’s credit score. However, they will consider certain financial factors that are related to the divorce. For example, if you have a joint credit account with your spouse and they use the entire balance, your credit score will take a hit because your name is still on the account.
How to Protect Your Credit Score when Getting a Divorce
The best way to protect your credit score when going through a divorce is to remove your name from any joint accounts you hold with your spouse. You should do this as soon as you know you are going to get a divorce. The sooner you can remove your name from these accounts, the less the divorce process will impact your credit score. If you have a credit account that lists your spouse as an authorized user, you should remove your name from these accounts, too.
If you have an existing mortgage after the divorce, such as for the marital home or a vacation property, make sure to refinance the loan. This will make sure the loan is in your name only, which can actually help you rebuild your credit.
Our Divorce Lawyers in Media Can Help with Every Detail of Your Divorce
When working with our Media divorce lawyers at Barbara Flum Stein & Associates, you can rest assured that you will receive knowledgeable legal advice about every aspect of your divorce. We will inform you of the law, ensure your rights are upheld, and help you obtain the most favorable settlement possible. Call us now at 610-565-6100 or reach out to us online to schedule a consultation with our seasoned attorney and to learn more about how we can help with your case.
Sources:
legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=23&div=0&chpt=33&sctn=1&subsctn=0
experianplc.com/media/latest-news/2017/how-much-of-a-role-do-finances-play-in-divorce/
