Heymann & Fletcher

How divorce can affect a credit score

Divorce is often a very tough time in a person's life. Dealing with the end of a marriage doesn't just have emotional implications -- it can also affect a person's finances. Though many people understand that a divorce generally results in a division of marital assets, they may assume that is the only way divorce influences one's financial future. Unfortunately, there is one problem that many people here in New Jersey may not know about. Divorce can negatively affect a person's credit score.

The reason this can happen is that married people often share joint accounts. This doesn't just apply to a basic bank account, either, since many people share a mortgage, car loan and even credit cards. Though the debt itself may be the responsibility of one person after the divorce is finalized, the other spouse's name may still be on the loan. That means that, legally, both spouses are still obligated to pay off the debt, and if one fails to make proper payments, it can show up in the credit history of the other spouse.

Fortunately, experts say there are ways to prevent this from happening. First, each spouse should start building his or her own credit, perhaps by taking out a credit card in his or her name only. Some accounts should have one of the spouse's names removed, while others may need to be placed on "inactive" status until a payment agreement is reached. Some people may want to freeze their credit to stop their ex from opening new lines of credit in their name.

This is just the start of several recommendations for protecting a person's credit score in the event of divorce. One of the most helpful tips is to consider working with an attorney here in New Jersey who has experience in divorce and family law issues. An attorney can help ensure that every facet of a divorce agreement is managed in a way that allows everyone involved to move forward to a new future.

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Heymann & Fletcher
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Toll Free: 800-481-8549
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Toll Free: 800-481-8549
Phone: 862-781-0029