A Divorce Does Not Directly Impact Your Credit Score

While it is true that the divorce doesn’t directly impact the credit rating of the couple involved in most of the circumstances it does lead to complications.  A divorce leads to concerns and disagreements on the financial matters.  Any joint accounts that get embroiled in the divorce process are likely to suffer which will in turn affect your credit history and your credit rating.  Every account that is jointly held is recorded individually in the credit history of both the people.  Which means that either of you is liable and responsible to make pavement on the account.  Going through a divorce does not change this.  But unfortunately owing to the animosity that the two people might feel towards each other payments may be deliberately or accidentally missed.  If this happens then the credit history of both the individuals will suffer.  It would be ideal if two people could sit down and have a clear and calm discussion as to how to continue making payments on the joint accounts during the proceedings of the divorce.  It would also be a good idea to close the joint account or to have the name of the secondary account holder removed from the account before the divorce.

Many people get confused by what a divorce decree stands for.  A divorce decree is an understanding between you and your spouse and the court as to who is responsible for the accounts opened during marriage.  This however doesn’t change the contract that you have with the lender.  If the spouse responsible for the account under the divorce decree is unwilling to take the responsibility for the account then you can still be held liable to make the payment if the contract has not been changed by the lender.  The late payment and the subsequent possible delinquency of the account will be reported on the credit report of both the spouses and will have a negative impact on the credit rating of both the individuals.

Once a missed payment or a delinquent account is reported it stays on a credit report for a period of seven years from the date that it was first reported.  Worse still it can go into collections which can come back to haunt you years after the debt was undertaken and even belong after it has disappeared from your credit report.

It is a sad but true facts that a windy tape and angry spouse may try to hurt their ex-wife or husband by overextending the purchases on joint credit account with the intent of straddling the other person by a huge amount of debt and trying to wreck their credit rating.  What such a person does not understand is that as long as the account is a joint account which is what it will need to be in order for the person to charge it, any unpaid amount will wreck the credit rating of both the people.  But in many circumstances are calculating person also may know that the ex-spouse that they are trying to target will make the payments since he or she will not want to ruin his or her credit history.

The best way to manage financial issues is to try and keep a civil relationship during the divorce and avoid the pitfalls of a vindictive and nasty divorce.  Try and close or convert to a single status as many accounts as possible before the divorce.