Divorce impacts virtually every aspect of your life. While most people tend to focus their energy on the more immediate, tangible impacts – such as child custody and property division – it’s also worth bearing in mind how your divorce could affect your credit score.
Here are a few steps to take right away – as soon as your divorce is underway:
Cancel joint accounts
You’ve spent years of your life intertwining your finances with your spouse. If you and your ex share any bank or credit card accounts together, there’s a chance that your disgruntled ex could start revenge spending – and you could be on the hook for the debt they rack up. This could damage your credit score over the long term. To avoid this, cancel any joint accounts.
Open new accounts in your name
If you’re going to close out your joint accounts, it only makes sense that you’ll want to open your own personal banking account and start new lines of credit just for yourself. It can be beneficial to apply for your new credit cards while you’re still married. This can allow you to claim your soon-to-be ex spouse’s income in your household income – which will likely result in approval for a higher credit limit.
Notify creditors
You’ve probably thought about sharing your decision to divorce with your family and friends. Sharing this news with your creditors probably wasn’t at the top of your list. However, notifying your creditors of your divorce can offer you valuable protection.
Send any banks, lenders and credit card companies a certified letter notifying them of your divorce. Ask them for a current statement of your balance and state that you will not be held liable for any debt acquired after the date on the letter. Request that the account be deactivated as soon as the remaining balance is paid off.
For more advice on how to protect your financial future as you navigate your divorce, it can pay to talk to an experienced family law attorney about your situation.
