5 Ways to Protect Your Credit Score During and After a Divorce
Your financial history talks about your credit history and reflects how you handled yourself in a divorce. Since protecting your credit score during divorce is a challenging task.
When you are going through a divorce, then you must think about how to protect your credit score.
When you change your marital status, your credit score will not get impacted immediately, but you can see some changes in your financial status. During and after the divorce, you must protect your credit so that it is not affected.
In this post, you will read about some methods to protect your credit during and after divorce so you will not be worried about your credit score.
5 Ways to Protect Your Credit Score
Divorce will not directly show an impact on your credit report, but due to some financial changes as a result of the divorce, you will see a drop in your credit score.
When you handle your credit properly, you could improve your credit score.
1. Close your Joint Credit Account
Joint accounts appear on your name and your spouses. It is best to close your joint accounts so that your debts are separate.
You can contact your card issuer for closing your joint account and making a single one for yourself. You may either pay the debts and close your account or change it to an individual account.
When you are not aware of any joint accounts, then look at your credit reports for that. You will get a free credit report by contacting any of the three major credit bureaus (Experian, Equifax, and TransUnion) or by the annual credit report.
Until your accounts are separated, you and your spouse are responsible for running the joint debt or risk damaging your credit. If you are responsible for your credit now, then your credit recovery will go smoothly because you don’t need to worry about your credit.
2. Inform your Creditors about your Divorce
Make sure that you inform your creditors about your divorce so when they approach the credit bureaus, they will mention it on your credit report.
In case of any joint debts, the creditors will know that and it will be easier for them to maintain separate records.
Since filing for divorce is an emotionally driven process, you and your spouse may not be focusing on the financial part at first, but it’s still important for your creditors to know. So when you have decided to file for a divorce, let your creditors know about it, which will protect your credit score during the divorce.
3. Make use of your credit cards wisely
Credit cards carry 30% of your FICO credit score. When your credit card debt is low, your score will rise. A divorce will not show any impact on paying off your joint debt. If you own a credit card in your spouse’s name, then it is better to remove the authorized user name from that card.
You need to maintain your credit card bills and pay them on time while you are undergoing the divorce process. If you are not able to make the full payment, it’s best to at least make the minimum monthly payment.
During the divorce process, make a note on your credit cards and their debt. Keep an eye on your credit card so that its debt will not increase.
4. Check your Credit Reports Frequently
It’s best to check your credit reports frequently. If you want to protect your credit during divorce, then look at your credit report before, several times during, and after the divorce.
You might not know the amount of debt owed in case of any joint accounts, but you will know the financial details from your credit reports.
If you find your spouse’s name added to your report, then make a request to the credit bureau to remove the last name from your credit report.
5. Put Credit Freeze to your Account
If you have any outstanding balance, your creditor will not allow you to close that account. In which case, you must freeze the account.
Freezing an account will help it by preventing further charges, but you are responsible for the existing balance.
When you freeze your account, your spouse cannot access your credit account and your spouse cannot open a new account in your name, too.
You must maintain your credit report and ensure that it is free of errors. When you file for a divorce, your credit report is also important.
In case of any errors on your reports, contact a legitimate credit repair service.
Of course, maintaining good credit habits like on-time payments, having low or no debt, and viewing your credit reports frequently, will help improve your score, which is important during and after a divorce.
Frequently Asked Questions
- Are debts shared in divorce?
In a joint credit card account, the debts are shared between the spouses. Even if one of them did not use the card, the debts are shared between them.
- Can you remove a co-signer from a mortgage without refinancing?
No, there is no option for removing a co-signer from a mortgage without refinancing. The lender must agree to remove your name from the co-signed loan.