There are several ways that your credit score could be damaged during the divorce process. You and your spouse may fail to properly communicate who is paying which joint bills, or the financial stress of the divorce and starting over could affect your ability to keep up financially. In some instances, your spouse may try to take out a loan under your name or damage your credit before the divorce is final.
While these are possibilities, it is important to understand that there are steps that you can take to prevent these problems from surfacing in your own divorce. When beginning the divorce process, be sure to run a free credit report and look at it closely. Review the report with your spouse, if possible, and take immediate action to close joint accounts, freeze joint accounts, or use joint accounts to pay off outstanding debts. In addition, make certain that you and your spouse have a plan for paying bills during the divorce process, especially in connection with any jointly owned property or in connection with your children.
Financial issues are a major concern for those considering divorce. Our Seattle divorce attorneys can help you navigate these issues and make certain that your divorce and property division is settled fairly.
Protecting Your Credit Score During Divorce
Most couples agree that the most overwhelming and stressful parts of a divorce have to do with handling their bank accounts, debts, assets, and other money issues. Especially for couples that have joint accounts and years of mixed financials, divorce can be confusing and hard on your wallet. During the process of separating your money and settling debts, it is extremely important that you are aware of your credit situation and that you protect yourself from beginning your new life with bad credit, damaged credit, or no credit.
Here are four steps you should take to protect your credit during a divorce:
1. Immediately request a free credit report. A credit report will help you see a list of your open accounts as well as a comprehensive list of your debts. Check the report for errors and sit down with your spouse if possible to review the document. If you believe your spouse may attempt to get a loan in your name during the divorce, you may also consider a credit monitoring service. To retrieve your free credit report, visit the Federal Trade Commission - Consumer Information website. You can receive one free credit report each year.
2. Close or freeze joint accounts as soon as possible. Bank and credit cards accounts should be closed, and if they cannot be closed, they should be frozen. Don’t be afraid to call banks and companies to explain your situation and ask for assistance.
3. Consider using joint assets to pay off joint debts. Cancelling out debts with your shared assets can save you the trouble of figuring out both situations. If debt still remains, be certain that you have a clear agreement on who is paying the debt and when. If the debt is joint and your ex doesn’t pay, it can still affect your credit score even after the divorce is final.
4. If you don’t have one, open a personal bank account. Set up a personal checking and savings account in your name and begin to keep your money there. Also get a credit card in your name if you do not already have one, as making regular purchases and payments can help build your credit.
To learn more about what steps you should take to protect your finances, contact the Law Offices of Molly B. Kenny at 425-460-0550 to set up an appointment.