PROTECTING A CREDIT SCORE DURING DIVORCE
May 15, 2020
Ending a marriage can have many financial consequences. According to a 2019 survey, 38% of divorcees experienced an over 50 point drop in their credit score following their separation. This can be particularly challenging for those who need access to credit to start their new lives. Luckily, there are some step individuals in Colorado and elsewhere in the United States can take to prevent a damaging hit to their credit score during a divorce.
Checking one’s credit report early on is a good idea, financial experts say. This helps people get a baseline on where they stand. More importantly, credit reports will show which accounts are linked to an individual’s credit. Take stock in particular of any joint accounts or credit cards that are included in the credit score, as these could take a particular hit in a divorce.
Next, take steps to separate any joint accounts. This prevents an individual from having late or nonpayments from the other party impact their score. Access to a personal credit card will make this process much smoother, so it’s a good idea to ensure that each individual has a credit card in their name well in advance.
Finally, it is important to communicate the change of status with creditors. Depending on the debt outstanding, there may be negotiations over who is responsible. Getting final decisions in writing, with the help of a lawyer, is always critical as well. A Colorado family law attorney can help individuals navigate issues such as division of liabilities in a divorce.