How Divorce Can Affect Your Credit Score
Divorce is often difficult and emotional, and many people don’t understand how it can affect their credit score. From neglecting your financial health to different utilization ratios, there are some key issues to watch out for. This is especially important if you suspect your ex may be impulsive or vindictive. Here are some potential issues to keep in mind.
If you two decide to close joint credit cards accounts, pay attention to your credit limits and how much you put on the card each month. For example, you might have a personal card and a joint card with $10,000 in credit each. Closing the joint account would halve your available credit, meaning that however much you put on the card makes up a much bigger portion of your available credit. This can negatively affect your credit score, even when you’re spending the same amount each month.
Authorized credit card users
If your spouse made you an authorized user on their credit card, it can positively impact your credit score—assuming they make payments in full and on time. Removing you as an authorized user can damage your credit, especially if you don’t have other lines of available credit to use.
Defaulting on joint debt
Often, judges will have each spouse share responsibility for joint debt. Beware: if your spouse defaults or is late to pay off their joint debt while your name is still on the account, this will damage your credit. Because some exes can be spiteful, forgetful or simply bad with money, it’s crucial that you monitor your accounts and credit score and make minimum payments on time.
Divorce mediation can help you reach agreements about debts, joint accounts and more. Contact the knowledgeable Long Island divorce meditators at Solutions Divorce Mediation to find out whether mediation could be right for you.