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Your credit scores are very important when it comes to your ability to access different financial products such as credit cards, personal loans, car loans, and mortgages. Having good credit is also important when it comes to qualifying for low-interest rates and gaining flexible terms. Unfortunately, there are a number of factors that can cause your credit to fall. But what about when you get a divorce? Does divorce have an effect on your credit?

Will Getting A Divorce Affect My Credit?

The answer depends on the state of your finances before you divorce, among other things. Fortunately, a person’s marital status is not part of their credit. Having said that, there could be indirect effects from your divorce on your credit if:

  • Your bank accounts were joint accounts
  • If your name is on any loan agreements that you took out with your soon-to-be ex-spouse
  • How long you’ve been married
  • Total debt shared
  • Any subsequent reduction in household income after getting married

Even though marital status is not taken into account on your credit report and it is not a factor that is used in the calculation of your credit scores, any number of financial complications can impact your credit when you get a divorce.

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How Shared Finances And Shared Responsibility Are Affected During Divorce?  

It’s common for couples in marriage to be co-borrowers on loans or share joint accounts. Upon divorce, each person involved is basically parting with one income (assuming both partners worked). This can place a financial strain on one of the partners if they made much less than the other.

If you are planning to get a divorce, one of the first things you should do is deal with your joint accounts, if there are any. The last thing you want is to be financially tied to your ex-spouse, even years after the divorce has been finalized. Whether these joint accounts are mortgages, auto loans, credit cards, or personal loans, they should be handled appropriately.

Will Joint Accounts Appear On Your Credit Report After A Divorce?

Joint accounts will still appear on your credit report, so if your name is on these accounts, you will have to handle such accounts before the divorce is finalized. That typically means completely removing one person from the account or closing it altogether. If joint accounts are not settled with lenders, this can pose a problem if the person responsible for making payments does not do so.

In this case, the credit of both people who are named on the joint account can suffer as a result. Any late payments will appear on both of your credit reports and can negatively affect your credit scores.

For this reason, it’s important to take measures to protect your credit in the event of a divorce.

Who Determines Who Is Responsible for Joint Accounts During A Divorce? 

Generally speaking, a divorce decree will be issued by a judge in order to determine who will be responsible for settling the loan or making the payments to pay it off in full.

Divorce decrees can be tough, despite them being necessary to delegate responsibility. Hopefully, you and your ex will behave in a civil manner so that everyone involved is treated fairly. But it’s not uncommon for divorcing couples to be vindictive with each other and make things much more difficult than they need to be. In such cases, your credit may be negatively affected if your credit account is not handled properly.

It would be in your best interests to work together with your ex to come up with a sound resolution that will benefit both parties and avoid any credit issues.

How Divorce Can Affect Income? 

It’s common for both partners in a marital union to work, combining incomes to create one larger household income. But when you get a divorce, your household income will be cut down to one. This can put a lot of financial stress on you and can even cause your credit to suffer if changes aren’t made.

How Does A Lower Income Affect Credit? 

With your income split, it may become more difficult for you to pay your bills, rent, and other debts. Missed payments on these bills may negatively affect your credit scores. The best way to avoid the financial stress that comes with divorces is to cut down on expenses and/or increase your income level. 

  • Cut Down Expenses – There will be many things that will naturally be cut down on when there is one less person living in a home, such as groceries. But there are still bills to pay. Be sure to prioritize all of your expenses and dedicate yourself to creating and sticking to a budget to help reduce the financial pressure that you may experience.
  • Increase Income – You might also want to see what you can do about increasing your household income, whether it’s getting a side job or taking steps to get promoted at work. With more money coming in, you’ll be in a better financial position to adequately cover all pressing bills and expenses while protecting your credit.

Keeping Tabs On Your Credit

It’s up to you to stay on top of your credit. If your ex was part of managing and keeping tabs on your credit, that situation will obviously change when you divorce. The best way to keep track of your credit score is to choose a free credit score provider. Check out the best options below.

 CostCredit ScoreCredit Report 
CompareHub logoFreeYesYesVisit Site
Borrowell logoFreeYesYesVisit Site
CreditKarma logoFreeYesYes-

All Joint Debt Is Your Responsibility

You are entirely responsible for making sure that any debt payments are made on time every billing cycle. If you are authorized on a joint account that the judge has assigned to your ex, it’s important to ensure that they are making their payments responsibly.

Keep tabs on your ex’s payments and how they are using the account, as it will affect you too. If your ex misses any payments, it would be in your best interests to cover those payments in order to protect your credit.

Divorce And Credit FAQs

Can child support payments affect your credit?

Missed child support payments can be included in your credit report which can negatively affect your credit scores. This information can stay on your report for up to 6 years.  

How can your joint credit card accounts affect your credit after a divorce? 

If you’re removed from a joint credit card account with your spouse, your credit limit will decrease which may increase your debt-to-credit ratio. This, in turn, may negatively impact your credit scores. 

How will I know which accounts are joint or shared with my spouse? 

You can check your credit reports with TransUnion and Equifax to see which accounts are joint or shared with your spouse. 

Will my divorce affect my credit scores? 

The act of filing for a divorce will not have any impact on your credit scores. However, a divorce may indirectly affect your credit scores due to the financial changes it causes such as reduced incomes, and higher expenses.  

Final Thoughts

If you’re in the process of filing for divorce, you don’t need to worry about your credit scores being directly affected. But, if joint accounts are miss managed during the process, it is possible that you will see an effect on your credit. The best way to combat this is to stay organized and make sure all payments are made on time. If your credit does suffer, the good news is that developing and sticking with healthy credit habits can help you rebuild your scores.

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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