How can Divorce affect your Credit
A divorce will not directly affect your credit score because the marital status of the person isn’t a factor for evaluating your credit score. The problem arises after the divorce due to debts incurred by both partners, division of financial responsibilities, split family income, and other financial issues.
These post-effects could damage your credit score because of the need to pay off debts incurred by both parties and financial strain.
To avoid this, here are three vital things to do;
Close all joint accounts
Shared debts is not a new trend in marriages. Secured and unsecured debts such as a mortgage, credit cards, and loans are usually shared between each spouse. During a divorce, the judge determines who get to pay all the debts, and that depends on the relationship between the couple.
Before you finish filling the divorce papers, ensure that you and your spouse are in good terms. Have an agreement between yourselves to shut down all joint accounts, pay off as much debt as you can and remove authorization from credit accounts. This will help both of you keep a good credit score even after the divorce.
Avoid careless spending
When you notice signs of a divorce, it’s time to start spending wisely, paying your bills and saving more. Everything is much more comfortable with two incomes but think about when itâ€™s just you. There will be more bills and more chances of you obtaining a loan.
To avoid financial strain due to the split, avoid overspending and focus more on building your credit score.
Monitor your credit
After the divorce, don’t hesitate to make all your necessary monthly payments early. If you are still authorized to an account given to your spouse by the court decree, then make sure they make payments when needed. Monitor it carefully and keep accounts; it will pay off in the long run.
Personal loans are a great option to help people consolidate debt and rebuild credit. Hayden auto agencies offers car loans that are affordable with no hidden costs, application or maintenance fees. To learn more, please fill the form below.
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