Whether you want to secure a mortgage, get a car loan or apply for a credit card, you probably know you need a decent credit score. Still, because credit scores fluctuate frequently for many different reasons, it is advisable to request and review your credit report at least once a year.
If you have a good credit score, you might worry about how your upcoming divorce is likely to affect it. According to Experian, the good news is that your divorce does not automatically cause your credit score to drop. Nevertheless, certain divorce-related circumstances can greatly affect your personal credit rating.
Your marital debts
You and your soon-to-be ex-spouse undoubtedly have joint credit cards, loans or lines of credit. Your divorce is unlikely to do anything to remove your obligation to pay your outstanding balances. Therefore, when wrapping up your marriage, you must be certain to deal with any joint financial obligations you have. This probably means dividing marital debts along with marital property.
Your ex’s financial responsibility
As long as your ex-spouse remains on your joint credit accounts, you are at risk. Indeed, if your ex misses payments or racks up considerable debt, you might see a major decline in your credit score. Consequently, you should think about removing your name from your joint accounts or closing them altogether.
Your financial position
If you have outstanding debts when your divorce becomes final, you should think carefully about your financial position. After all, if you do not have enough money to make minimum payments, your credit score could drop. Moreover, if you accumulate new debts, your higher debt-to-income ratio might affect your credit rating.
Ultimately, to ensure your credit score remains stable during and after your divorce, you must make safeguarding it a top priority.