If you are contemplating your financial future after you divorce, you should consider how strong your credit score will be once your divorce is complete. Keeping up a healthy credit score will be crucial when you want to secure a new loan or a mortgage. Given the drastic change of separating your finances from your spouse’s, you may wonder if your credit score will suffer as a result of your divorce.
As Nerdwallet points out, a credit report does not list your marital status, so your divorce alone will not decrease your credit score. However, the actions resulting from a divorce could harm your finances and damage your credit.
The impact of divorce chaos
Divorces can be a hectic process. With everything divorce puts on your plate plus the emotional turmoil divorce can generate, it is easy to neglect the ordinary duties of paying off your bills. You might send off a credit card or loan payment past the due date. You could also spend more than you do usually on your credit card, which boosts your card utilization. These actions may drop your credit score.
Checking your credit report
Following your divorce, consider asking for a current copy of your credit report. At this stage, you will want to make sure your credit report is up to date and free of errors. This will help ensure that your report does not list accounts that you are not using any longer. Also, if you removed your former spouse from your accounts, your spouse’s name should not be on them.
These actions can help keep expenses that are not yours off your credit report. If your report still lists your spouse on your accounts, your spouse can rack up expenses that will impact your credit score. If you find errors on your report early enough, you can dispute the mistakes and correct them so they do not damage your credit history.