Rebuilding Your Credit After A Divorce

Dated: 04/06/2019

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Many divorcing individuals anticipate some of the tougher emotional, social, and physical aspects of divorce proceedings. Still, they can be blindsided by one they had not considered – their credit score. In fact, credit scores can be hit hard, even if an individual has always been very good with money.

Although working with a reputable Burlington County divorce lawyer can help mitigate some credit score damage, it may be inevitable. Yet it does not need to be permanent, as credit scores can be redeemed with patience and diligence.

Why Credit Scores Are Hard Hit Post-Divorce
Why would a credit score be affected after a divorce? The first reason is the financial differences between being married and being single. Married partners usually split some, if not all of their bills. After the divorce, each person is responsible for paying everything on their own. Obviously, this can be overwhelming, even with a decent income stream.

Another common occurrence during heated divorces are spouses refusing to pay off bills, or not paying bills they agreed to pay. Thus, the mortgage may go two months or longer unpaid without one spouse knowing. Similarly, credit card bills and thousands of dollars in interest may pile up.

If making payments becomes the responsibility of one ex-partner or the other, if they fail to pay on time, both will likely take the credit score hit. Paying bills on time can keep a credit score up or raise a score that has been impacted after a divorce.

It is also an unfortunate fact that there can be identity theft on the part of a soon-to-be ex. For example, an angry former spouse may buy expense items using the name of the soon-to-be ex-spouse.

It does not take much to lower a credit score, especially with bills going unpaid and household income amounts changing significantly when one partner moves out. The good news is that credit scores can be improved, beginning immediately after the divorce.

How to Mend a Flagging Credit Score After Divorce
After divorce, both parties should retrieve copies of their credit reports if they have not already. The three big credit reporting companies are Experian, Equifax, and TransUnion.

Every Unites States citizen with credit is entitled to receive a free credit report from each bureau annually. Therefore, a divorced individual should plan to pull a credit report from each bureau separately every four months, just to stay on top of any changes, such as newly opened accounts.

Aside from remaining vigilant about credit reports, each divorcing partner should also consider the following:

  • Put together a budget that includes income and expenses. Even a simple spreadsheet can keep everything in perspective and give a clear indication of budget needs. It can also show places to save money or stop spending.

  • Be cautious about making any large purchases aside from necessities. It may be important to rent or buy a smaller home after a divorce, but it may be unnecessary to buy a pricey new car or take an expensive vacation.

  • Pay down any revolving credit, especially high-interest credit cards. Some credit card companies will also negotiate lower interest fees when asked if the creditor has had a decent track record of paying off balances before the divorce.

  • Pay all bills on time. Many debtors overlook this very simple way to rebuild their credit scores. Making on-time payments, even if they are minimal in nature and do not attack interest right away, can offer relief from a tanking credit score.

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Manuel Quiros

My name is Manny Quiros, I’m a real estate professional in the “Disney Area”, I have lived in this area since 1999 and have called this area my home and place my wife and I to raise our three wo....

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