Getting a divorce is a very big decision that can significantly impact many areas of your life. One of these areas is your credit score. While getting a divorce does not directly lower your credit score, it can affect your credit in many ways. Click here to know about the financial aspects of a divorce.
Tips to protect your credit score during a divorce
Starting a new chapter of your life is not an easy thing to do. It is normal for people’s credit scores to drop when going through a divorce. Your credit score can drop for several reasons, but being aware of how to protect your credit score can help you avoid this. Some tips to protect your credit score during a divorce are:
- Discuss your finances with your ex-spouse and create a plan.
- Close your joint accounts, and try clearing off any debt that may create problems later.
- If you can not close your joint accounts, you can try converting your joint accounts into individual accounts.
- Review all your accounts to verify that they are in your name.
- Be sure to make your payments on time.
Tips for rebuilding your credit score after a divorce.
If your divorce has affected your finances and subsequently lowered your credit score, there are ways you can build it up again. Some ways to rebuild your credit score after a divorce are:
- Resolve all joint debts that you have with your ex-spouse
If you and your ex-spouse have any joint debts, you must figure out which debt accounts you want to close and how to divide the debt after divorce.
- Continue to make your monthly payments on time.
The best thing you can do to raise your credit score is to make all your monthly payments on time.
- Establish your credit history
If you have not done so, make sure you establish credit in your own name. If your ex-spouse is listed as the authorized user on your credit cards, your credit score can significantly lower once you have been removed from their lines of credit.
- Try to keep your credit utilization low.
After your payment history, your credit utilization is the second most important factor in your credit score. Generally, you should keep your credit utilization below 30%.
Schedule a consultation with a professional
If you and your spouse are going through a divorce, you should seek professional help managing your post-divorce finances. Schedule a consultation with an experienced divorce lawyer today and get all your questions answered.