How to Rescue Your Credit After Your Split
Even in the best-case scenario, a divorce will have a significant impact on your finances. A divorce will significantly change your financial resources between splitting property, assets, and debt and potentially paying child support and alimony. However, most people assume that these changes end with divorce.
Unfortunately, that’s not entirely true. If you were married to someone fiscally irresponsible, your finances might still be affected by their behavior after your divorce. In particular, your ex-partner can drag down your credit score unless you take action. Keep reading to learn how marriage affects your credit report, why your ex-spouse can harm your credit rating, and what you can do to prevent it.
How Marriage and Divorce Affect Your Credit Score
When you get married, your credit becomes heavily intertwined with your spouse’s. Most married couples do things like opening joint bank accounts and cards, sharing ownership of assets like cars, and signing for loans like mortgages. All of these items tie your score to your partner’s.
Furthermore, any assets and debts you gain while married are automatically considered joint assets unless a contract states otherwise. This means that even debts your partner has racked up without your knowledge are technically partially your responsibility. This can impact your score dramatically.
Divorce is supposed to resolve these issues. Part of the divorce process is the division of assets, in which accounts and assets are split between the partners. In many divorces, the court helps determine who owns what and splits assets and debts equally between both parties. After this process, your finances are supposedly no longer connected to your ex-partner’s.
Can Your Ex-Spouse Affect Your Credit Score After a Divorce?
The problem is that divorce doesn’t always separate your accounts. While the courts can order certain accounts in one person’s name, you need to make sure this transfer happens. Creditors won’t know to change account holders unless you tell them. Furthermore, if you’re sharing assets during and after your separation, your ex-spouse’s actions will continue to affect your credit score through those assets.
For example, if you share a credit card, your spouse can continue to make purchases with the card during the divorce. They can also fail to pay the account balance. Since your name is also on the card, your credit report will show a higher balance and late payments. Even if your spouse is awarded the card in your divorce, the card company may not know to take your name off the account. This will lead your score to reflect your ex’s poor behavior.
Protecting Your Credit During and After Divorce
While your spouse may affect your credit score even after you’ve split, you can take action to minimize negative impacts. Here’s how you can make sure your finances are truly separated from your ex-partners and make sure you’re no longer being harmed by their financial decisions.
Close Shared Accounts
The first and most important step you can take is closing your shared accounts. Even if you’ve been awarded certain accounts in the divorce, it’s best to close them and open new ones in your own name. This helps prevent paperwork errors from allowing your ex-spouse to access these accounts or for their actions to impact your finances. Steps you should consider taking include:
- Refinance mortgages and loans in your own name
- Close and transfer balances on shared credit cards
- Close shared bank accounts
- Transfer funds from shared investment accounts
All of these actions help you create a clean slate for your future.
Ensure Bills Are Paid
While your finances are sorted out during and after the proceedings, make sure that all your bills are paid. Even if an account goes to your spouse, it will affect your finances until it’s no longer legally connected to you. That means that you need to stay on top of things like loan payments and card minimums.
While it may not feel good to pay for purchases you disagree with, it will be better for your finances in the long run. At least pay the minimum payment on loans and credit cards until the negotiations are complete. Once everything’s finalized, you can let your ex-partner handle the payments on accounts you’re no longer responsible for.
Contact Creditors if Necessary
Next, reach out to creditors and credit bureaus. If you’re seeing your spouse’s behavior impacting your finances, it’s likely that they haven’t taken the appropriate action to remove you from their accounts. For example, a credit card may still list you as a secondary cardholder, or a loan may still have your name on it.
You can figure out which accounts are causing problems by contacting the report bureau and asking for a full report. At the same time, you can let the bureau know that you’re now divorced from your partner, and their actions should no longer affect your score. You may even be able to have black marks removed from your report.
Next, reach out to individual creditors and let them know about your separation. You may need to send them legal proof of the divorce agreement and how the settlement requires the account to be handled. However, this should be enough for them to remove you from the account for good.
Get Information in Writing
Finally, once you’ve informed creditors and agencies that you’re divorced, get confirmation in writing about the actions they’re going to take. It’s one thing to have verbal confirmation that you’re no longer on an account, but an email or a letter that explains that is much stronger proof. You may be able to use this written confirmation to have problems removed from your report.
Reclaim Your Credit Score
You deserve a fresh start after getting a divorce. If your former partner is still hurting your finances, you might not be able to access the lifestyle you want. That’s why it’s so essential to fully separate your accounts from your ex-spouse and reclaim your score for good.
Whether your score is still being hurt despite your divorce or you just want to make sure that doesn’t happen, you can get help. Schedule your consultation with a qualified high-income divorce attorney today. They can help you choose the right course of action to become completely independent and start your new financial life as soon as possible.
