Does Divorce Affect my Credit Scores?

Divorce is a difficult and stressful experience that can have a significant impact on many aspects of a person’s life, including their finances. One of the most common concerns that people have after a divorce is how it will affect their credit score.

There are a number of ways in which divorce can impact credit scores. First, the divorce process itself can lead to a decrease in credit score. This is because divorce often involves a number of financial transactions, such as the sale of a home or the division of assets, which can temporarily lower a person’s credit utilization ratio.

In addition, divorce can also lead to a decrease in income. This is because one or both spouses may lose their job or have to take a lower-paying job after the divorce. A decrease in income can make it difficult to make monthly debt payments, which can further damage credit scores.

Finally, divorce can also lead to an increase in debt. This is because divorce often involves the accumulation of new debt, such as legal fees or debt from the sale of a home. This new debt can further strain a person’s finances and make it difficult to make monthly payments.

If you are going through a divorce, there are a number of things you can do to protect your credit score. First, it is important to stay on top of your finances and make all of your monthly payments on time. You should also try to keep your credit utilization ratio low, which means using less than 30% of your available credit.

If you are struggling to make your monthly payments, you may want to consider talking to your creditors about a payment plan or consolidation loan. You can also contact the National Foundation for Credit Counseling (NFCC) for free help with credit counseling and debt management.

By taking these steps, you can help to minimize the impact of divorce on your credit score.