During the divorce process, a person has a lot on his or her mind. From the finances to the children, a divorce can affect many aspects of a person’s life; however, one aspect often doesn’t cross people’s minds: their credit score. Divorce does not directly affect a person’s credit score, but many people suffer from credit damage after a divorce. In short, a divorce would then indirectly cause credit problems due to financial issues.
Below, we’ve listed two major ways a divorce can indirectly hurt your credit rating:
- No one is paying the joint bills – If the parties had joint credit cards or mortgages, they need to be paid…by someone. If your ex-spouse was ruled to pay the amount, and doesn’t, this can bring down your credit score because the bill is in your name as well.
- You Can’t Keep Up with bills – If your expenses are greater than your income, or you spent a lot on the divorce, it may be hard for you to pay your bills in the aftermath of it all. Late payments will hurt a credit score.
Fortunately, there are ways you can solve the above problems and prepare yourself so you don’t get into a messy financial situation that lowers your credit score. Here are some tips:
- Make payments on bills your ex-spouse isn’t paying.
- Increase your income so you can pay all bills as a newly single person.
- Decrease your expenses so money can go toward paying bills.
- Remove your ex-spouse from your credit accounts.
- Stay on top of all payments.
- Adjust your lifestyle to your new, reduced income. This may including moving to a smaller home or apartment or selling your car for a less expensive one, or even going to restaurants less.
- Create a budget to see what you can or cannot afford. If you need help, reach out to a financial advisor.
Once you establish your own separate credit accounts and adjust your lifestyle to your new situation, you will be able to keep your credit score from plummeting. Make sure to check your credit report and credit score to see where you stand.
If you’re looking for a legal consultation or advice in the practice of divorce law, contact Barkus Law. Barkus Law works with clients in Broward County and other parts of South Florida. Click here for more information.