How divorce may impact a person’s credit score

On Behalf of | Sep 25, 2019 | Divorce |

Ending a marriage doesn’t have any direct impact on a person’s credit score. However, Ohio residents and others who have recently gotten divorced may see their credit score go down after doing so. This could occur because an individual has closed joint credit accounts or has removed his or her name from those accounts. A person may also experience a reduced credit score if a former spouse fails to pay down a joint debt as ordered in a divorce settlement.

Although the other spouse may be held accountable for failing to live up to the divorce decree, creditors have the right to go after anyone named on a joint debt. They also have the right to report late or missed payments to a credit agency regardless of what the divorce settlement says. It is possible that a person could try to open credit accounts in a former spouse’s name.

If those balances are not repaid at all or in a timely manner, a creditor could take punitive action against the person named on the account. Therefore, it could be a good idea for an individual to put a fraud alert on a credit report or freeze his or her credit entirely. Those who are newly divorced are encouraged to check their credit reports for signs of fraud or errors.

The end of a marriage could have financial implications for an individual. For instance, it may be necessary to pay down joint debt, pay bills on a reduced income or plan for retirement on a single income. An attorney may be able to help a person obtain spousal support payments or other financial resources in a divorce settlement. This may make it easier for an individual to maintain a reasonable lifestyle after ending a marriage.