If you’re going through a divorce or considering filing, you’re likely bracing for emotional and legal challenges. But one area that’s often overlooked is how divorce can affect your financial health in the long run, especially your credit score. Many people are surprised to learn that divorce can hurt your credit indirectly, even years after the final decree.
In addition to more visible financial issues like child support and alimony, divorce can complicate your financial life in ways that leave lasting marks on your credit history. Your credit score, which reflects your financial reliability, can take a hit if divorce leads to missed payments, unresolved joint debts, or miscommunication with creditors.
Many divorces become financially complex due to shared assets, accounts, and debt. This can make it difficult for each spouse to clearly identify who’s responsible for which financial obligations, opening the door to costly mistakes and damaged credit. Below are common ways divorce can negatively impact your credit:
Joint Bank Accounts
Most married couples share joint checking or savings accounts. While this can simplify tracking marital property during divorce proceedings, it can also create serious financial risks if the accounts aren’t handled properly during the separation process. If joint accounts remain open or both parties retain access, one spouse could unintentionally or intentionally overdraw funds, leaving the other on the hook.
It’s crucial to close or separate joint accounts before finalizing a divorce and ensure only one party has access going forward. Failure to do so may result in overdrafts, missed payments, or unauthorized spending that harms your credit score.
Confusion About Obligations to Lenders
Once the divorce is finalized, each spouse needs to know which debts they are legally and practically responsible for. This includes mortgages, car loans, credit cards, and lines of credit. Even if a divorce agreement assigns a specific debt to your ex, lenders aren’t bound by the divorce decree, they still see both names on the account.
To prevent damage to your credit, it’s important to contact each creditor directly. Clarify account ownership, request written confirmation of account changes, and, when possible, refinance or close joint accounts entirely. Keeping your name on an account your ex is managing puts your credit at risk if they miss payments.
Bitter Ex-Spouse Behavior
In emotionally charged divorces, it’s not uncommon for a spiteful ex to take actions that deliberately harm the other’s financial standing. This can include maxing out joint credit cards, stopping payments on shared loans, or refusing to communicate with creditors. Even if you’re no longer legally responsible for a debt according to your divorce agreement, your credit score can suffer if your name remains on the account.
In these situations, protecting your credit score requires proactive planning. Work with your attorney to outline a strategy for closing or separating shared accounts and monitor your credit report closely for unusual activity. You’re entitled to a free credit report annually from each of the three major credit bureaus; don’t wait for a missed payment to find out something went wrong.
Protecting Your Credit During Divorce
Whether your divorce is amicable or contentious, it’s essential to work with a knowledgeable New Jersey family law attorney who understands the financial complexities of separation. An experienced divorce lawyer can help with immediate concerns like custody, alimony, and property division while also guiding you through long-term credit protection strategies.
With the right legal guidance, you can avoid common credit pitfalls and ensure that joint debts are properly managed. Don’t assume that everything will sort itself out once the divorce is finalized; take control of your financial future now.
Need Help Navigating Divorce and Credit Concerns?
If you’re thinking about filing for divorce, or you’ve already begun the process, the experienced NJ divorce attorneys at Graziano & Flynn, P.C. are here to help. Our team provides strategic, compassionate legal support in Cherry Hill and throughout New Jersey, helping you address both the legal and financial aspects of divorce.
Contact us today to schedule a confidential consultation and learn how we can protect your interests including your credit.
