You probably know that using your credit cards too often and not paying bills on time can cause your credit score to suffer. A divorce can also wreak havoc on your credit score, but not in the ways that you expect.
Your credit score is not based on your marital status, so the act of divorce is not what causes scores to often decline. However, credit issues and divorce often go hand in hand. What usually happens during a divorce is that the bills end up not getting paid or a user on a joint account runs up the tab and leaves it for the other party to pay.
While you are likely bombarded with a million other things during your divorce, like splitting assets, looking for a new place to live, helping your kids adjust to their new lives and dealing with custody matters, you need to continue to make sure your bills are getting paid. Credit issues can haunt you for many years, so take the steps now to avoid such problems. Here are some things to keep in mind as you navigate your divorce.
Your divorce decree outlines how assets and debts will be divided. While it may say that your spouse gets the house, if the home is in your name as well, you are still responsible for making the mortgage payments. Creditors do not honor divorce decrees. They don’t care who the judge decides should pay the bill. They go by how the asset is titled. Until your spouse refinances the home so that it is in his or her name only, you’re still on the hook for making the payments if you want to protect your credit.
The same issue applies to joint accounts. A joint account will go on both your and your spouse’s credit reports. If your spouse is responsible for paying a joint account, if he or she fails to do so, your credit will be impacted. Another issue that can happen is if you are responsible for paying the debt on a joint credit card account, if your spouse goes on a shopping spree after the divorce, you could still be held liable. The best course of action is to close all joint accounts at the time you decide to file for divorce. You will still have to pay off the balance, but at least no further charges will incur.
Divorce can impact you in many ways, and credit scores are no exception. While you will be preoccupied with many things during a divorce, It is important to stay on top of your bills so you don’t see your score drop.
The Law Offices of Todd K. Mohink, P.A. our Columbia divorce lawyers can advise you from a financial standpoint. We can help you keep your finances on track so your creditworthiness doesn’t suffer. Schedule your free consultation by filling out the online form or calling our office at (410) 774-5987. We have two locations in Maryland to serve you.
7310 Ritchie Highway, Suite 910
Glen Burnie, MD 21061
30 Corporate Center
10440 Little Patuxent Parkway,
Columbia, MD 21044