How to Prevent Divorce from Destroying your Credit Score

Signing divorce papers sometimes does not signal the end of your emotional anguish. Among other things, the potential exists for financial ruin. Many have indeed seen the detrimental effects on their credit reports for many years following. To prevent divorce from destroying your credit score, it is important to proactively take a few important actions.

Instructions

1

Understand that even if the judge orders your ex to be responsible for a certain debt, this does not legally exonerate you, if your name is on the original loan. For example, if your ex is ordered to make full payments on a car he has taken that is in both your names but fails to pay, the lender will still come after you for the money. Plus, it is your credit report that will reflect the late or missed payments. You could sue but even a victory will not restore your credit score.

2

Gather a list of all your joint debts. Omit nothing. If you had an amiable divorce, you can make this list together.

3

Demand in the divorce paperwork that your ex refinance all debts into his name. Give a time limit. If possible, you may want to wait to have the divorce finalized until your ex has done this.

4

Confirm with your creditors that you are no longer legally responsible for the debts and get this confirmation in writing. It is surprising how quickly your name can "reappear" on a debt once it is assigned to a collection agency. Always keep written proof.

5

Monitor your credit reports. The last thing you want is for your ex to stop payment on a debt but it is your credit that takes the hit. It should not happen if the debt has been refinanced; however, this does not mean that it never happens. This is why you need to keep your proof on file so you are absolved of all obligation.

6

Beware of credit score carelessness. If your ex cared little about his own credit score, he will certainly regard yours the same. However, if he was always meticulous about financial matters, there is no reason why he would not continue this way with debts from the divorce.

7

Do not accept the excuse, "My credit is too low to refinance these into my own name." Bad credit score lenders are everywhere. Though he will probably pay a much higher interest rate, it is highly unlikely that his score is too low to refinance at all. Let him know this point in a civil way. Do not budge on these terms, especially if your ex has a low credit score. However, you cannot expect your ex to refinance his debts if you are not willing to refinance your own.

8

Return to court, if necessary, to have the divorce decree enforced. Don't be afraid to do this. It is your credit score on the line and that determines your financial worth to every current and future lender. Do not just sit back and allow someone else to destroy that.