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Can Divorce Impact my Credit Score?


Going through a divorce is never easy. There are so many things you will need to take care of before, during, and after the marriage dissolution is finalized by the court. Add in the fact that children will be impacted by the divorce differently than you and the stress can be overwhelming. But one aspect of the process that many divorcing spouses do not consider is their credit score.

Does getting a divorce impact your credit score? The short answer is, there will be no direct impact on your credit score, but there are things that you may or may not do during the process and after the divorce is finalized that might adversely affect your credit.

No Direct Impact

There is no direct impact on your credit score when you finalize a divorce, because the credit reporting agencies do not consider marital status as a factor in determining your creditworthiness. That being said, there are indirect effects from the divorce that may have an impact on your credit score.

Former Spouse Fails to Pay Joint Bills

Did you fail to separate all of the finances in the divorce? If so, you might still have joint bills in both your name and your former spouse’s name, and some of these might be your ex-spouse’s responsibility. If this is the case, you’d better hope he or she pays those bills. If they don’t, this will negatively impact your credit score – unless you decide to pay them yourself. The bottom line here is that the financial institutions don’t care who was told by the judge to pay these bills. If both names are on them and they aren’t paid, both people will see their credit score suffer.

Refinancing the Home

Have you decided to keep the family home in the divorce instead of selling it and splitting the funds? If so, you might have to refinance the home to get a mortgage with just your name on it. This can add a lot of debt to your name and to your financial record, which could impact your credit score. This is one reason many divorcing couples sell the family home and split the funds from the sale.

Dropping Down to One Income

Did both you and your spouse have jobs while married? If so, the drop to one income from two after the divorce is finalized might impact your credit. The biggest impact will be when you try to apply for a new credit card, a financing plan, or an auto loan. Your income might not be enough to successfully acquire one or more of these accounts.

Access to Accounts Remains

Does your former spouse still have access to your bank accounts or other financial accounts? If so, this can impact your credit score immensely. This is especially true when couples keep joint credit card accounts after they’ve separated or divorced. Both people named on the account will be responsible for the amounts that are charged. If those bills aren’t paid, your credit score will take a hit.

Decrease in Credit Limits

Many credit companies will check in on their customers every so often and review their financial records. The credit agreement might state that the credit company can change the limits on the account if they deem necessary. If your former spouse was making more money than you, and the credit company reviews your situation after the divorce, the company could decide to lower your credit limit because your income is now substantially less.

One Spouse Fails to Pay Their Share

Depending on the divorce decree, your former spouse might be required to pay for some of the shared liabilities from the marriage. If this is the case, your spouse will need to make these payments. If he or she fails to pay their share from the divorce decree, it can significantly hurt your credit score. This most often happens when there is property that is owned jointly, like the family home, or any other property.

Contact an Experienced Divorce Attorney Today

Are you ready to file for divorce in Pensacola, Florida? If so, it’s time to contact an experienced divorce attorney about your situation. Call the office of Crystal Collins Spencer at 850-912-8080 to schedule an appointment today. Divorce is complicated. Making sure your soon-to-be former spouse doesn’t have access to your finances is important. Our attorney can help ensure that your finances are protected in divorce.

316 S. Baylen Street, Suite 520
Pensacola, FL 32502
Telephone: 850.912.8080 Fax: 850.912.8028
246 Tupelo Courtyard
Sandestin, FL 32550
Telephone: 850.424.6683
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