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How a divorce may affect your credit score 

You may be concerned about what a divorce will do to your finances, especially your credit score. While there is no guarantee that problems will not arise, there is some possibility of negative impact on your credit from a divorce, depending on how you proceed to manage your money.

Make Payments Regularly

The biggest way that your divorce can negatively impact your credit score is by affecting your ability to make payments on time. Divorce proceedings preoccupy a person's focus, so being late on payments for things such as utilities or a mortgage is not uncommon. Some reasons for that, other than simply reduced access to funds, are as follows:

  • You may be too distracted from the turmoil of the divorce to notice that you missed a payment.
  • The relationship between you and your partner may be so difficult that you are unable to sit down together and agree who is paying which bill.
  • Even if you and your partner were able to sit down and discuss payment arrangements for existing bills, communications in the early divorce phase are especially difficult. So, there may be continuing confusion, if there is no written agreement.
  • If you have moved from the marital residence, you may not be receiving bills from your creditors at your new address.

To avoid these challenges, you may want to consider dividing the responsibilities early on by putting your commitments in writing, preferably a document drafted and approved by your attorney. This should help prevent confusion or vindictive actions by your partner, and protects both parties by providing certainty.

Prevent Financial Abuse

Because divorce usually involves the division of joint accounts, debts and other finances, there is the chance that one party may abuse their authorization on a joint account, even after the relationship has legally ended. A divorce decree does not, by itself, change the contractual relationships between the parties and creditors such as credit card companies.

In cases where there is joint debt, an agreement will need to be reached and the lender will need to be contacted. Monitor the activity on your accounts and do what you can to avoid funds being taken or used without your knowledge until the other person's name is removed.

Where there are joint credit accounts opened during marriage, it is good idea to simply close that account in its entirety and open a new one at the correct juncture of the divorce process.

Between attorney fees and court fees, divorce isn't cheap. Careful treatment of your financial matters in the divorce process is essential.

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