Going through a divorce doesn’t directly affect your credit; however, there are some situations that might occur that could have a negative impact on your creditworthiness. These typically stem from the financial changes that occur when you end the marriage.
One primary factor is the continuation of payments on credit accounts, all of which will have to be handled during the property division process. All marital debts have to be paid off or divided before the marriage can legally end. Paying off the debts, if possible, can reduce the risk of your ex’s actions impacting your credit.
What happens if the debts are assigned?
If debts are assigned to a party during the property division process, that person is responsible for paying the debt. Unfortunately, creditors don’t have to follow that order because they weren’t part of the property division process. This means that if your ex is assigned a debt and doesn’t pay for it, the creditor can report the missed payments on your credit report even though the debt wasn’t assigned to you.
How can you prevent negative credit impacts?
Besides paying the debts off during the property division process, negative credit impacts might be minimized if both parties are required to transfer the accounts they’re assigned to an individual account. Creditors don’t have to automatically do this, so it’s typically only possible if the person who is assigned the debt has an income and credit history that allow them to make this transfer.
Remember, the marital debts are only one part of the property division process. Looking at the situation as a whole may be beneficial so you can make decisions that you feel are in your best interests.