Divorce can impact your life in many ways. Naturally, you may worry that going through divorce will damage your credit score. Having healthy credit is crucial if you want to take out loans or a mortgage on a new home after your divorce is complete. Fortunately, the act of going through divorce does not automatically mean your credit will suffer.
Still, divorcing your spouse could have negative impacts on your credit because of what may happen during the divorce. Nerdwallet explains some important facts to help you to understand how to keep your credit score from suffering damage.
Protecting your credit in divorce
If you know divorce is looming, take actions to protect your credit. If you have a jointly owned credit card with your spouse, consider closing it. You do not want your spouse to rack up expenses on the card and leave you with the responsibility of paying them off. Take a look at any account that your spouse may use to increase your debt load.
Also, the pressure of divorce may cause you to pay bills after their due date. You might also spend more money than usual as a way to cope. This could increase your credit utilization. Restraining your spending through your divorce can help avoid lowering your credit score when you need it as high as it can be.
Errors can lower your credit
Once your divorce is complete, check your credit report. There are bound to be many changes to it because you had closed joint accounts or opened accounts that you own by yourself. Be sure that all the information is up to date. Also look for information that is erroneous. If you locate mistakes, you can get them cleared up so they do not diminish your credit score.