When you decide to dissolve your marriage it can significantly affect many areas of your life, including your credit. However, the impact doesn’t have to be dire. By taking proactive steps, you can successfully navigate this major life change while preserving your credit. Please read on to understand how divorce may influence your credit score, what actions you can take to protect it, and how a skilled Bristol County Division of Assets and Debts Lawyer can help you manage these challenges.
Does Divorce Affect Your Credit?
First, it’s important to understand that a credit score is a number that financial institutions use to estimate how likely you are to repay a loan on time. Essentially, it paints a picture of your credit risk for lenders. This number is important because it can affect your ability to get loans, rent a house, or even secure a job. Higher credit scores typically receive more favorable credit terms, which could translate into lower payments and less interest paid over time.
While divorce itself doesn’t directly impact a person’s credit score, as marital status is not factored into credit reporting, the financial changes that occur during this significant life transition, like managing joint credit accounts, can drastically affect your credit score if not handled properly. This change in financial circumstances can potentially lead to missed payments or closing accounts, which can negatively impact your credit. During the divorce process, it might appear necessary to apply for new credit due to financial pressures, but having multiple inquiries on your credit report can temporarily decrease your score.
As you can see, there are various ways in which a divorce can impact your credit score. Therefore, it’s in your best interest to consult with an attorney to discuss your specific situation and formulate a plan to manage your credit during the divorce process to ensure your financial well-being.
How Can I Shield My Credit Score During My Divorce?
During a divorce, it’s imperative to take practice steps to protect your credit. The first thing you should do to shield your credit is to consult a lawyer who can explain your state’s property laws regarding the division of assets and debts. They can help you draft an agreement that clearly outlines who will be responsible for which debts after the marriage ends. This type of clarity can help reduce the risk of missed payments, which could negatively impact your credit score.
If necessary, consider freezing your credit report. This action will prevent anyone from opening new accounts in your name and stop credit bureaus from sharing your credit report with third parties. Freezing your credit allows you to organize your finances before taking on new loans or credit cards. It’s essential to note that if you choose to freeze your credit, you must do so with all three major credit bureaus.
Furthermore, you should remove yourself as an authorized user on any credit cards that your ex-spouse is the primary cardholder and remove them from any accounts they are authorized on. This will help reduce potential liability for future purchases they make and fail to pay back on time. It’s important to regularly check your credit score. This will help you identify any discrepancies early on.
If you are getting a divorce and need quality legal support, please don’t hesitate to contact a determined attorney from The Law Offices of Cynthia L. Hanley, P.C. Our firm is prepared to fight for your future and safeguard your financial interests. Connect with our legal team today for skilled representation.
