When you are going through a divorce, there are many logistics to consider. One of them is separating finances. While protecting your credit may be low on your list of priorities, it’s crucial to take proactive measures to ensure your credit remains intact as you navigate the complexities of your divorce. Please continue reading to learn how you can shield your credit score during a divorce and how our experienced Monmouth County Division of Assets Attorneys can assist you during these tough times.
Does Divorce Affect Your Credit?
A credit score is a three-digit number that financial institutions use to determine how likely you are to repay a loan on time. Credit scores are based on information from your credit report. Essentially, it represents your credit risk. Your score can affect various aspects of your life, including your ability to rent a house, receive a loan, or even secure employment.
It’s important to understand that divorce itself has no direct impact on your credit score. Your marital status is not a factor in credit reporting. However, a divorce can impact your credit if you or your ex-spouse mismanages joint credit accounts, or the stress of dissolving your marriage causes you to miss payment deadlines, your credit can certainly take a hit. Furthermore, you may be going from two incomes to one, adjusting to make alimony, child support, or other payments that you didn’t have before. This change in financial obligations can make it more difficult to make payments on time and in full.
What Steps Can I Take to Shield My Credit Score During My Divorce?
During a divorce, it’s important to take proactive measures to ensure your credit remains intact. Generally, the first thing you’ll want to do is consult a lawyer who can explain New Jersey’s property laws regarding how assets and debts will be divided. They can also work on a separation agreement that outlines who will bear responsibility for which debts. This can provide clarity and reduce the risk of missed payments that could affect your credit score.
You should make it a habit to regularly check your credit score. You might consider subscribing to a credit monitoring service, which can alert you to any changes in your status. This can help you detect any discrepancies or unauthorized activity early on.
If you are concerned about your ex-spouse’s financial responsibility, you should close or separate all joint accounts. This will prevent your ex-spouse from accruing new charges that could increase mutual debt. You should also remove yourself as an authorized user on any accounts where your spouse is the primary cardholder to avoid liability for future charges. If necessary, you should consider a credit freeze, which will prevent new accounts from being opened in your name without your permission.
While navigating a divorce, it’s crucial to follow these steps to ensure your financial well-being during this significant life transition. At Paone Zaleski & Murphy, we are prepared to help you safeguard your financial interests. Connect with our firm today for more information.
