When going through a divorce, there are a lot of concerns involved. If you and your spouse have joint credit debt or loans, things can get particularly messy. Not only are you splitting up possessions and joint assets, but you have credit debt to deal with on top of everything.
Protecting Your Credit Score
As you go through your divorce and come out on the other end, you need to be prepared for an adverse effect on your credit score. While divorce itself shouldn’t affect your credit score, the loan modifications and new lines of credit that you might be forced to open can affect your credit score. Being aware of this is essential.
If the damage done to your credit score is unavoidable, at least you can start work immediately on repairing it. Of course, the first thing you want to do is eliminate all credit debt that is in your name. Once you’ve eliminated your credit debt, you’ll be well on your way to preparing your credit score.
If you still have joint debt after the divorce, make sure your ex-spouse is on the same page with you when it comes to paying off that debt. Even if you make your payments in full and on time, your ex-spouse’s failure to do so can hurt your credit score.
Next, don’t be too eager to close multiple lines of credit. Closing lines of credit affects your credit score adversely, and throws up red flags for creditors. Keep the credit lines open and available, even if you aren’t using them.
Acting immediately is key to recovering your credit score after divorce.