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Protecting your credit score during and after divorce

When you are negotiating your divorce, especially during the current economic state, it is likely that you and your spouse will have not only property but also debt to divide. It is not uncommon for one spouse to be ‘awarded’ a full debt, such as a credit card or a car loan, which means that that spouse will be solely responsible for making payments on that debt from that point on.

Unfortunately, credit card companies and other creditors don’t care too much about divorce decrees. If your spouse has been assigned a debt and fails to make payments on time or at all, the creditor will probably seek payment from you, regardless of what your divorce papers say. As such, your spouse’s failure to make those payments will most likely do some damage to your credit score.

So what can you do to protect your credit score after divorce? Here are a few tips.

  • If your former spouse has been ordered to make the payments on a joint credit card and you are no longer obligated to pay on it, take your name off of the account.

  • If you and your former spouse own a home together and he or she remains in the house after divorce, see if your spouse can buy you out of the mortgage. If that is not possible, you may want to consider selling the house outright and splitting the proceeds. However, that may not be an option in today’s real estate market, so if this is your situation you will want to keep a very close eye on your mortgage to ensure that your spouse is making payments.

  • If you have a joint auto loan, it may be best to refinance it in the name of the spouse who is responsible for the payments.

Regardless of your financial situation, it is a good idea to watch your credit scores closely after a divorce. This will alert you quickly in the event of any changes to your finances.

Source: MSN Money, “How divorce affects your credit,” Rob Berger, Aug. 9, 2012

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