How a divorce may impact a person’s credit profile

A Florida resident’s credit score won’t decrease merely because he or she chose to get a divorce. However, events that occur during or after a divorce takes place may result in a lower score. If a couple has an outstanding balance on a joint account, a creditor can come after either person named on that account if it is not paid down in a timely manner. This is true regardless of who was ordered to repay those debts in the final divorce decree.

It may be worthwhile to pay off a joint debt before the divorce is finalized. Alternatively, the outstanding balance can be divided and transferred to separate individual accounts. Ideally, the joint account will be closed as soon as it has been paid off or a balance transfer has taken place. Individuals are also encouraged to remove their former spouses as authorized users on credit accounts obtained in their names only.

Those who are going through a divorce may want to obtain and review a copy of their credit report. It will list any information about an individual that has been submitted to a particular credit agency over the past seven years. A person is allowed to obtain one free copy of his or her credit report per year from each of the three major credit agencies.

divorce may have a significant impact on a person’s finances. An attorney may be able to explain how ending a marriage may influence an individual’s credit score or history. Legal counsel may also explain how retirement or other accounts may be divided in a final settlement and the proper way to do so. Heeding an attorney’s advice may allow a person to avoid paying taxes on any money that he or she receives from a spouse.

Scroll Up