Credit Myth: Once You Are Divorced, Your Ex Has No Effect On Your Credit

It is often assumed that severing ties with someone you were once married to, will free you from any negative effects they will have on your credit. Unfortunately, this credit myth is not true. While divorce itself will not directly affect your credit score, the fallout from even the most cooperative of separations certainly can affect it and often does.

Joint Debts

The first thing to consider is your joint debts. Do you have a credit card together that you are both equally responsible for paying? Do you have loans together that still need paying every month? Do you have joint lines of credit, a shared mortgage, store credit cards? If all of these debts are in both of your names, and your ex-spouse stops paying their fair share, you’re still on the line for it all. If you can’t pay it without his or her help, and you miss payments or even default because your ex is not cooperating, this will affect your credit horribly.

It’s important to pay off everything you owe jointly, even if your ex is no longer contributing. While this feels unjust, you can try and take your ex to court to get your money back at some point in the future. It’s important, for your own credit score, to keep making those payments on time every month regardless of what your ex is doing.

Cost of Divorce

You also have to take into consideration the sheer cost of divorce. While this expense won’t affect your credit on its own, it can have an indirect effect. The cost of lawyers, court fees, filing fees, alimony and child support can all put you in a position where you are unable to pay down your debts as effectively as you might have wanted. You also might have no choice but to take on more debt to be able to pay for your divorce proceedings, especially if it’s a particularly nasty divorce. This makes it pretty obvious that giving up some ground to make the entire process quick and relatively painless is in your best interests. You don’t want your credit score to suffer just because you’re both being stubborn. Remember, stuff can be replaced and it’s not worth sacrificing your credit to the gods of divorce over.

If your divorce is particularly long, drawn out and expensive, it can push you over the edge, and could even leave you with no alternative but to declare bankruptcy. This will have a long-lasting negative effect on your credit. A bankruptcy will stay on your credit report for at least six years, marking you as a high-risk borrower to most potential lenders.

Pay Off and Close

It is best to close any and all credit accounts that are in both your names. A consolidation loan could be in order, but you need to get rid of revolving lines of credit that your ex-spouse still has access to. Even the most collected, responsible people can succumb to being vengeful during divorce proceedings and as much as you may have yourself convinced that you know this person would never hurt you in this way, it is possible. You could wake up tomorrow with your credit cards maxed out, owing more than you can possibly pay back on your own. Take this important step to close any joint accounts you have immediately before anything happens to make the situation worse.

In short, a quick divorce between two people who agree on everything and have no joint debts is not going to have any effect on your credit score. Sadly, divorce rarely happens this way, though.

Have you had a split that affected your credit? Let us know in the comments!