Episode forty-nine of the Divorce and Your Money Show discusses whether or not getting a divorce can hurt your credit.
Regardless of where you are in the process of divorce, you need to look at your credit report. It entails the details and history of your credit cards, auto loans, mortgages, personal loans, or any other debt you may have had in your history.
Here is the reason why it is important: When the divorce is over, you will have to open accounts in your own names. You will have to get your own personal credit card, auto loan, or mortgage; your credit report will determine how much lenders will charge you. It will affect the amount of interest you will have to pay when you need to borrow money. Here is another reason for checking your credit report: You may have accounts that you might have forgotten about; they are worth discussing with your attorney and financial team.
Your marital status does not affect your credit score in any way. However, you need to be aware of something, whether you are married or divorced: As long as your name is on a credit account, you will be responsible for it. If your name is still on the account after the divorce, you are not off the hook—even if your spouse is responsible for the debt. If your name is not taken off the account, it can come back to hurt you.
Getting your name removed means that you are no longer responsible for those debts, and it may even help your credit score in some cases. Divorce does not directly hurt your credit score, but you need to be careful. Take your name off the accounts.
Key Learning Points:
- Regardless of where you are in the process of divorce, you need to look at your credit report.
- A credit report has a detailed history of your credit accounts.
- Your credit score will affect the amount of interest you will have to pay when you need to borrow money.
- Marital status does not affect your credit score.
- As long as your name is on a credit account, you will be responsible for it.
Thank you for listening to the Divorce and Your Money Show. We hope the show helps you through one of the most difficult periods of your life. Shawn Leamon is also the author of Divorce and Your Money: The No-Nonsense Guide. One-on-one divorce coaching services are available at www.divorceandyourmoney.com.
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