Don’t Let Divorce Tank Your Credit Score
After a divorce, people are often surprised to learn that they no longer qualify for loans because they have an ex who has destroyed their credit rating. You can avoid that fate by taking matters into your own hands.
Get Financially Organized
While it’s always important to be fiscally aware, this is especially true when you’re going through a divorce. Knowing the details of your finances will eliminate surprises down the road. It’ll be crucial to list your shared property, assets, and debt, and make a file containing important financial documents including:
- W2 stubs;
- Savings and checking statements;
- Tax returns for the past 3-4 years or more;
- Pay stubs;
- 401k, Roth, pension and similar accounts;
- Credit card statements;
- Stocks and additional securities;
- Mortgage statements;
- Car loans;
- Credit report.
Aggressively Guard Your Credit
Chances are you’ve accrued some debt as a couple, and that debt has the potential to grow if your spouse continues to have access to joint accounts. Address the issue immediately:
- Because shared credit cards can impact your credit score, the best option is to pay off and then close any joint accounts if possible. That way your ex won’t be able to amass charges that you are partly responsible long after the divorce has been finalized. The fact is, even if your divorce decree specifies otherwise, creditors can hold you accountable for missed payments.
- If paying off joint credit cards is not feasible, the next best thing is to freeze the accounts. Then neither partner can continue to charge on them.
- Get your own credit cards and start using them to build your individual credit and improve your credit score.
- When it comes to checking and savings accounts, convert any joint accounts to yours alone. This will necessitate getting your spouse’s consent. If that’s not possible, remove your name from the account and create your own.
- Let creditors know that you are getting divorced, and make sure they have current contact information for you.
Update Any Official Documents
Pull out any documentation related to life insurance, estate planning, health insurance, and even car insurance. You may need to make changes to beneficiary plans, power of attorney and so forth. Your employer can help you to make changes to your health benefits, as well.
Other Financial Considerations
Because your future financial status will have an impact on your credit, don’t forget to consider the way divorce may impact you in terms of taxes, support payments, home maintenance, and health insurance premiums. The pot of money available to make payments toward your debt is likely going to shrink, so it’s best to move forward with your eyes wide open.
Legal Representation is Key
The experienced Boca Raton divorce attorneys at WiseLieberman always work to achieve the best possible outcomes for you. To discuss your situation, schedule a confidential consultation in our Boca Raton office today.
