A divorce can severely disrupt your finances. Going through the divorce process in Georgia involves separating all marital property and dividing all marital debts.
Even if you start your divorce with your finances in order and a good credit score, the process can have an impact on your credit score.
Your credit score will not change just because you get divorced
It should be important to note that getting a divorce does not affect your credit score. If you believe a divorce is the best choice for your situation, you should go forward with it, while seeking ways to reduce harm to your credit score.
There are several reasons your credit score may go down after a divorce. When you split up debt in a divorce, any joint debt remains joint debt, regardless of what a divorce order says.
This means that if your ex-spouse is ordered to pay a certain joint debt, but misses payments, your credit will still be affected.
It is best to avoid this potential problem by including language in your divorce settlement agreement that states that the spouse who is responsible for a certain debt must remove the other spouse’s name from the debt, if possible.
The downside of removing your name from debt
However, having your name removed could still impact your credit score if your spouse was making payments. Regular, on-time payments could boost your credit score, but not if your name is no longer on the account.
The same thing may happen if you close joint cards. Your credit score will decrease once a joint card is closed, since your overall available credit is lower.
What you can do to reduce the damage
There are some things you can do to minimize a divorce’s effect on your credit score. Check your credit score prior to your divorce and throughout the process.
Look for any new and unknown accounts and monitor any credit activity. If you are concerned your spouse could open new accounts in your name, consider a credit freeze, which prevents any new debts from being made in your name.
Whether you are already going through the divorce process or just starting, talking with a divorce attorney about ways to reduce the impact on your credit score is a good idea.