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Protect your Credit through a Divorce

Divorces are challenging as there’s a lot to think about in a

short amount of time, usually under pressure. And while

handling finances is often at the forefront of the discussions

related to the separation of assets, unfortunately, managing

and maintaining personal credit can be swept aside to deal with


So, if you happen to be going through or preparing for a divorce

or separation, here are a few considerations that will help keep

your credit and finances on track. The goal is to avoid

significant setbacks as you look to rebuild your life.

Manage Your Joint Debt

If you have joint debt, you are both 100% responsible for that

debt, which means that even if your ex-spouse has the legal

responsibility to pay the debt, if your name is on the debt, you

can be held responsible for the payments. Any financial

obligation with your name on the account that falls into arrears

will negatively impact your credit score, regardless of who is

legally responsible for making the payments. A divorce

settlement doesn’t mean anything to the lender.

The last thing you want is for your ex-spouse’s poor financial

management to negatively impact your credit score for the

next six to seven years. Go through all your joint credit

accounts, and if possible, cancel them and have the remaining

balance transferred into a loan or credit card in the name of

whoever will be responsible for the remaining debt.

If possible, you should eliminate all joint debts. Now, it’s a good

idea to check your credit report about three to six months after

making the changes to ensure everything all joint debts have

been closed and everything is reporting as it should be. It’s not

uncommon for there to be errors on credit reports.

Manage Your Bank Accounts

Just as you should separate all your joint credit accounts, it’s a

good idea to open a checking account in your name and start

making all deposits there as soon as possible. You’ll want to set

up the automatic withdrawals for the expenses and utilities

you’ll be responsible for going forward in your own account.

At the same time, you’ll want to close any joint bank accounts

you have with your ex-spouse and gain exclusive access to any

assets you have. It’s unfortunate, but even in the most amicable

situations, money (or lack thereof) can cause people to make

bad decisions; you want to protect yourself by protecting your


While opening new accounts, chances are your ex-spouse

knows your passwords to online banking and might even know

the pin to your bank card. Take this time to change all your

passwords to something completely new, don’t just default to

what you’ve used in the past. Better safe than sorry.

Setup New Credit in Your Name

There might be a chance that you’ve never had credit in your

name alone or that you were a secondary signer on your ex-

spouse’s credit card. If this is the case, it would be prudent to

set up a small credit card in your name. Don’t worry about the

limit; the goal is to get something in your name alone. Down

the road, you can change things and work towards establishing

a solid credit profile.

If you have any questions about managing your credit through

a divorce, please don’t hesitate to connect anytime. It would be

a pleasure to work with you.

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