Can divorce negatively impact your credit? Read what our Virginia Beach family law attorney says

Credit scores and your divorce. The short answer is.....maybe.

Credit reports do not factor in marital status when generating scores. However, because divorce can impact your personal finances – there may be an indirect impact on your credit score if don’t pay close attention to how assets and finances are allocated during negotiations.  

Divorce and the Division of Financial Assets 

Divorce involves the division and re-allocation of financial assets that were previously shared, and your personal credit report scores were generated in part by the financial standing reflective of your joint union. After the divorce, the status of some of your financial accounts will have changed. Because a credit report does not take into account your divorce, those changes might be scored negatively regardless of the reason.  

In addition to not taking marital status into account when generating credit scores, credit agencies don’t always recognize divorce decrees or their terms. This means that even if the court makes a judgment that establishes explicit divisions of debt or responsibility for a debt, a credit agency will not necessarily adjust their methods for generating your score. For example, if your ex-spouse was given responsibility for a joint loan and they fail to stay current on payments, that can negatively impact your score. Similarly, divorce does not close joint accounts, so if payments aren’t current, it could impact your credit score.    

Here are three steps you can take to ensure your credit is not unnecessarily hit as a result of divorce:  

  • Close or separate joint accounts 

  • Remove your name from debts your ex is responsible for 

  • If you have reason to believe your ex-spouse may intentionally try to defraud you after the divorce, it may a good idea to put a credit freeze on your accounts to prevent him or her from opening up new accounts in your name.  

Our Experienced Virginia Beach Attorneys Are Here To Answer Your Divorce Questions. Call Us Today!

It is always important to closely monitor your credit reports, but even more so as you undergo financial changes made as a result of your divorce. An experienced attorney will ensure that you understand how your financial situation will be impacted during and after the divorce. If you have any questions, please contact us at 888-691-9319 or fill out this short form to get started. 

Related information:
Understanding the Issues Relating to Divorce
The Extended Influence of Credit Reports 
Prenuptial Agreements in Virginia  

Be the first to comment!
Post a Comment