How Can Divorce Hurt Your Credit Score?

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Last updated on November 3rd, 2020

Divorce can be traumatic. For many, the belief is that the damage is only emotional, but in reality, many Americans also see their credit score drop after a divorce. Divorce itself won’t hurt your credit, however. While that is good news, the fact is that the side effects of divorce can seriously harm your credit score. Here’s how divorce can hurt your credit – and how to protect yourself.

How Divorce Can Hurt Your Credit Score

The most basic way divorce can impact your credit score is by placing strain on your finances. Often, many of the revolving accounts are in both parties’ names. Due to the messy nature of divorce, your ex might ignore credit card bills or loans like mortgages, feeling like they aren’t their problem until a judge decides. If the judge rules that these loans are held jointly, any missed payments will impact both spouses’ credit scores negatively.

Financial strain can also occur when two incomes servicing one debt become one. If you have a car loan or credit card in your name, for instance, but your ex also paid off the balance, divorce can leave you with less income to cover expenses. This has the negative impact of making payments more difficult, which can potentially lead to missed payments, late fees, and collections.

Actions such as those listed above are due to several reasons. It could be one spouse struggling to cope with separation and neglecting their debts. It may also be the result of spite by one ex-partner to another. Regardless of the cause, however, you must take a proactive approach and protect your credit score after divorce.

How to Protect Your Credit After Divorce

Late payments, vengeful partners, and debt are a potent combination. Fortunately, there are steps you can take to insulate yourself from the problem of credit card debt when you divorce.

Separate from Your Spouse Financially

The first thing on your financial to-do list after divorce is to separate your finances from those of your ex-spouse. Financially separating yourself can take on several different forms, including:

  • Remove them as an authorized user on any credit card accounts
  • Refinance existing balances to divide debts into each spouse’s name
  • Close accounts held jointly

Refinancing debts can be challenging – especially if one party is unwilling. Closing accounts jointly held can be done in writing or over the phone. While one method is enough, getting verification through phone and mail can help protect you legally should your spouse file a legal claim.

Refinancing jointly held debts is more difficult but can be managed through either cooperation or legal action. When a spouse is unwilling to compromise, your attorney may have an easier time of getting results (though litigation should always be a last resort).

Make Regular Payments

Always make on-time payments with accounts you are responsible for and contact lenders if you are struggling to stay afloat financially. Around 35% of your FICO Score is influenced by payment history, so ensuring you are up-to-date is essential for protecting your credit. Most lenders (including credit card issuers) are willing to work with debtors who need assistance – but only if they ask.

Refinance Debts to Reduce Payments

Debt consolidation is an excellent option for newly divorced individuals looking to improve their finances. Like late payments, some lenders may be willing to negotiate the terms of your debts, potentially even consolidating multiple accounts with the same bank. This process can help you reduce monthly payments.

There are also private companies and products designed for debt consolidation. Companies like OppLoans and Smarter Loans provide personal loans that allow consumers to pay off debts with higher interest rates, instead paying one lower rate each month.

The Upgrade Card is a similar idea, though in credit card form. The card provides credit limits of up to $20,000 and a very competitive APR. The card works as both a credit card and installment loan, allowing users to pay down existing balances then make one low payment in installments of between 12 and 60 months. This can take some of the pressure off your finances, protecting you from a divorce-related credit score plunge.

Related Article: Five Tips for Maintaining a Good Credit Score

About: Cory
Cory Santos

Cory is's "Jack of all trades" and resident credit expert, covering all facets of the credit card space. Cory holds academic degrees in both the U.S. and U.K. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.

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