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How to protect a credit score during divorce

On Behalf of | Apr 29, 2019 | Divorce

There are steps that people in Kentucky can take to keep divorce from damaging their credit score. This damage is primarily the result of two issues. One is that it is not uncommon for people to struggle financially after a divorce. The other is that what is written in a divorce settlement is irrelevant to creditors; they will pursue people for debt if that debt is in their name even if an ex-spouse is supposed to pay all or part of a debt.

People should remove the ex-spouse as an authorized user on accounts, and they should try to work with the spouse to get all the shared assets into one person’s name. In some cases, they might sell the asset. If there is joint debt, the proceeds of an asset sale could be used to pay it. Some assets may need to be retitled and refinanced so that the spouse who no longer owns it does not have an obligation any longer. People who think a spouse may be vindictive should monitor their credit or freeze credit.

Women in particular may be at risk of having their credit damaged or of struggling financially after a divorce. They still earn less than men on the whole. Half of women in an Experian survey said their credit was hurt during their marriage.

Both the higher- and lower-earning spouse may have concerns during the divorce process. Higher-earning spouses may be concerned about protecting their assets, such as retirement accounts, or being able to keep up with spousal or child support payments. Lower-earning spouses or those who do not work outside the home might be concerned about getting a fair share of the marital assets and how they will support themselves after the divorce. Their attorneys may be able to assist them in negotiating an agreement they are both happy with.