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How Does Divorce Affect My Credit Report?

How Does Divorce Affect My Credit Report?

With so many people divorced these days, it is important to know how this will impact your credit report. The good news is that divorce does not directly affect your credit scores. Instead the financial issues that swirl around the proceedings can cause you to miss payments or to be late with them, lowering your score and hurting your credit history. 

A common problem from messy divorces is that the attorney fees can wipe you out financially. If you are unable to keep up with your bills, this will impact the 35 percent FICO credit score category of timely payment history.

If you no longer have enough income to keep up with your expenses after the divorce, you also may turn to using your credit cards to fill the gap. This would cause your credit card balance utilization (the second most important category at 30 percent) to become dangerously high (over the 30 percent FICO looks at) in short order. 

Another problem could surround who will pay the bills on joint accounts like mortgages and credit cards. The divorce court judge may rule that your spouse is required to make the payments. If your spouse has a lower credit score and is unconcerned with this, they simply may not make the payments. 

A spouse might also be resentful of making payments for assets that were awarded to you (like a home). Because your name is also on the joint accounts, late payments and delinquent accounts will adversely affect your credit score and history too. 

The credit bureaus do not know or care if you are married or divorced. This status does not even show up in any of your credit history. They do notate all names on the accounts regarding repayment issues though. 

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