How Does Divorce or Legal Separation Affect Your Credit?

Getting a divorce or legally separating is unpleasant to begin with. The last thing you want to hear is how it can affect your credit. But it’s something you should understand, especially if you have recently initiated or concluded divorce or separation proceedings.

divorced couple

The good news about divorce and credit scores is that divorce doesn’t impact your credit directly. Lenders don’t look at marital status to determine your creditworthiness. In fact, that would be illegal discrimination.

What does affect your credit, however, are the financial issues that come along with divorce.

Most of the financial matters are handled in the final decree of divorce. Still, many people fail to fully understand what the final decree does and doesn’t cover when it comes to credit. Get educated so you can take your new life into your own hands — with the best credit score possible!

Final Decree of Divorce

A final decree of divorce may legally grant the ability to close joint accounts and deal with all joint financial matters including who is responsible for which accounts.

However, it does not change any financial obligations you and your ex-spouse have with your creditors. Creditors aren’t bound by the final decree of divorce, so they still expect payment until the debt is paid in full.

If payment is not received by the person in charge of the account, then the negative entries will be reported on the credit reports of all persons whose name was on the account when it was created.

Even missed or late payments that occur years after the divorce has been finalized can have a harmful effect on your credit score.

Unfortunately, spiteful behavior during a divorce can have a huge impact on your credit score. Many times, soon-to-be ex-spouses decide to run up bills in hopes to ruin the other’s finances. However, they usually don’t realize that doing so will affect them just as much.

Nevertheless, there are ways you can protect your own finances and credit during the divorce process, whether you have a spiteful ex-spouse or not. Even well-meaning people can unknowingly do damage, so it’s best to take matters into your own hands.

What to Do to Protect Your Credit After a Divorce

If you are going through the divorce process right now, then you’ll want to take some of the following steps to protect your credit from being destroyed during a divorce.

The good news is that going through all the steps should only take you about one month to complete. We’ve also included some long-term strategies to keep your credit score and finances on track. Get started soon so you can experience the best results — and fast.

Close Existing Joint Credit Accounts

As soon as possible, close any joint or authorized user accounts you have with your spouse. Because so many spiteful spouses will run up credit accounts during a divorce, this is a way to prevent yourself from being held responsible for any unwanted charges.

Even if you left each other amicably, your ex-spouse might still unintentionally hurt your credit by charging items on your joint credit cards. Either way, you don’t want to be legally responsible for paying any of those bills. It’s important to note that these accounts will still appear on your credit reports and still affect your credit scores.

As you close the credit card and bank accounts, open up individual accounts so that you can begin re-establish your own credit before the divorce is finalized. Many times recent divorcees struggle to rebuild their credit because of any unwanted charges that may have happened during the divorce.

This can also reduce stressful situations during the process because you don’t have to worry about whether or not you have available credit in case you need it.

It will also help rebuild your credit history for when it comes time to make a major purchase like a car or house — two likely scenarios when you’ve just been through a divorce.

Settle Debts with Creditors

Debt settlement is a common practice for those dealing with credit repair and debt management, but you can also try using it at this pivotal point in your life.

To settle a debt, you close the accounts by offering to pay a smaller amount than what you owe. Creditors don’t always agree to it, but if they do, make sure that you get the agreement in writing so that the creditors can’t come after you later.

If you can’t come to a settlement with your creditors, freeze your accounts. Freezing your accounts will prevent you from being able to use them for the time being. When the divorce is finalized, the remaining balance will be transferred to the person in the divorce responsible for the account.

Contact Your Creditors

It’s important to keep people in the know, especially when those people deal so heavily with your finances. Let your creditors know that you are going through a divorce. Talk to them and request that you still get billing statements from any shared accounts if you change addresses.

This will allow you to be able to keep track of any late or missed payments and be informed of any new charges from your ex-spouse. When it comes to divorce and money, it’s always better to be in the know than in the dark.

Start Fresh with Your Finances

Whether you already held the responsibility of managing your finances when you were married or didn’t pay much attention to your money during that period of your life, divorce changes your month-to-month finances.

woman fresh start

Start off by taking a new look at your budget. Has your income level changed? Do you have any new expenses like child support or alimony?

How about other regular expenses, like your new rent or mortgage, or your car payment? Chances are, at least one — if not more — of these variables has changed as a result of your divorce.

Sit down and take a solid hour or two to get all of your thoughts and figures on paper (or screen). If you’re new to budgeting, consider hiring a financial advisor or taking a personal finance class to help you get started.

It may be tough at first, but after a while, you might actually enjoy having total control over your finances and your future.

Take on New Debt with Caution

While we always hope that divorce proceedings are quick and inexpensive, the truth of the matter is that they oftentimes are not.

Even with the best of intentions, parties on both sides can become emotional and frustrated when having to decide how to split up kids, a house, cars, and everything else you’ve built together over the years.

These legal battles can result in excessive lawyer fees, sometimes costing tens of thousands of dollars. If that ends up being the case, you might need to take out a personal loan to keep up with your legal financial responsibilities.

Hopefully, you’ve been careful with your credit and can qualify for a loan with competitive interest rates and terms.


If your credit score is lower than you’d like, look for alternative lenders who specialize in loans for people with poor credit. No matter what type of financing you choose, just make sure your monthly payments fit into your new budget.

Depending on the results of your divorce proceedings, you might also be in the market for a new home and maybe even a new car, if your joint assets have been sold off. Don’t let this become an opportunity for retail therapy.

While you want to be comfortable in your home and your vehicle, particularly as you start such a bold new chapter of your life, you also don’t want to saddle yourself with burdensome monthly payments. Find the right balance in what makes you happy and what keeps your wallet full.

Check Your Credit Report Regularly

Once your divorce is finalized, wait a month or two and then request a copy of your credit report. Waiting for this amount of time gives credit bureaus the chance to include any new entries that may have come out of your divorce.

Check to make sure those old joint accounts are truly closed and that no new debt has been included from your ex-spouse.

You can get a free copy once a year from, a website that is authorized by federal law and your best resource for accessing your credit history.

If you want to check your credit report more than once a year, you can purchase additional copies to ensure accurate changes have been made. You can also find a credit monitoring service that helps you track your repair process.

With your credit report in hand, check for any inaccuracies or inconsistencies. If you see any red flags, consider reaching out to a credit repair specialist who can provide you with solutions that are specific to your personal situation.

Going through a divorce can be a difficult and painful time in your life, but it doesn’t have to hurt financially. If you take these precautions, you should be prepared for any hardships that may come to your credit during a divorce.