Credit Problems After a Divorce

Divorce can be a particularly difficult situation to deal with in many areas of life. One aspect that is often overlooked is how it can impact your credit profile. After completing a divorce, you might find that your credit score has been negatively impacted because of some simple oversights on your part.

Splitting the Debt

When you go through divorce, the divorce court will generally split everything equally. This includes both assets and any debts that you have accumulated. Even if you have not accumulated any debt personally, you will usually have to take care of half the debt that your spouse accumulated. When this happens, you could find yourself with a debt payment that you cannot afford. Having a high debt ratio hurts your credit score and can make it difficult to qualify for additional financing in the future.

Account Confusion

Another problem that you might find when you go through divorce is that the names on the various accounts that you have are not as they should be. For example, the divorce court might split the debt equally but one of the credit cards that you both used is only in one person's name. When this happens, the other spouse might not make his portion of the payment for the debt. This could hurt the credit score of the person who still has the account in her name.

Removing Names

When you get a divorce, you may also want to pay special attention to which accounts you have your name on. For example, you might have a joint mortgage with your spouse and be forced to move out. Even though you move out, this does not remove your name from the mortgage or remove your financial responsibility associated with it. If the spouse who is still living in the house does not make the mortgage payment, you might not know that the payment is not being made but it will hurt your credit just as badly.

Fraudulent Charges

If the terms of the divorce are not amicable, you might run into a situation where one spouse makes fraudulent charges on the other spouse's account. The other spouse has all of your financial information and could use that against you. When you get divorced, you need to remove your ex-spouse from any accounts to which you do not want her to have access. This will go a long way towards helping you keep control of your money and your credit score.