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How a Divorce May Affect Your Credit Score

A divorce doesn’t have an automatic or direct impact on your credit score. It won’t appear on your credit report, and no debts or judgments between you and your spouse will be listed either. However, divorce involves property division, which is likely to mean changes to your score. This is especially true if one spouse was the primary wage-earner and the other spouse stayed home to raise children or care for the home.

Here are some of the ways property division during your divorce may affect your credit score:

  • Drop in income — If you and your spouse had a two-income household, suddenly going down to one income could make it tough for you to manage your monthly bills. You can move to a more affordable house and reduce your expenses, but it can be tough to adjust to a significant reduction in income.
  • Dividing marital debts — In a divorce, the court divides the marital debts as well as the martial assets. This means you could end up paying off credit card debt or other bills, which can impact your score.
  • Paying off the mortgage — For many people, their home is their biggest asset. If the court awarded you the marital home in the divorce and you’re now responsible for the mortgage, taking on all that debt in your name alone can affect your credit score.

Fortunately, there are proactive steps you can take to avert any negative impact. These include:

  • Making a budget — Creating a monthly budget can help you understand how much money you have coming in versus how much you’re spending each month. You can also factor in how alimony and child support will impact your monthly budget.
  • Keeping up with bills — Your payment history is the most significant factor in determining your credit score, accounting for 35 percent of the total. Missing just one or two monthly payments can hurt your score, so it’s important to keep current on every obligation.
  • Putting credit accounts solely in your name — If your ex-spouse was an accountholder or cardholder on any of your credit accounts, contact your creditors and ask them to remove your ex. This prevents your ex-spouse from making charges or taking on additional debt that could hurt your score.
  • Revamping your resume — If you left the workplace or otherwise interrupted your career during your marriage, now is a good time to refresh your resume and perhaps brush up on job skills or training to improve your employability.

If you’re concerned about how ending your marriage will impact your credit score, an experienced Pennsylvania divorce lawyer can advise you. The Law Offices of Jennifer Courtney & Associates, P.C. helps clients throughout Bucks County navigate the financial complexities of divorce. Call us at 215.493.3360 or contact us online to schedule a consultation.

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