Apparently this question has been coming up a lot lately, since MSN chose to address the issue of what happens to one’s credit during and after a divorce. Valid question, right? When you figure that there are nearly one million divorces in the U.S. each year, that’s a good two million people trying to pick up the pieces and figure out finances after the split. It’s certainly worthwhile to know what will affect your credit, and how. I think that Rob Berger, and MSN Money partner, does a great job addressing the questions and providing solid answers and suggestions:
“Divorce is painful. In addition to the emotional and familial challenges, divorce can also affect your finances. And that brings us to a question I’ve heard from a number of people: How does divorce affect your credit?
First the good news. Divorce itself does not have a direct effect on your credit, credit history or credit scores. Your marital status is not used to assess your creditworthiness, and that’s true whether you are divorced or not.
Now to the not-so-good news. Divorce can indirectly affect your credit in several ways. Because many married couples have some joint financial obligations, the way you handle the financial separation will determine if and how your credit scores change. Understanding the potential impact can help you plan ahead and avoid costly mistakes.”
Click here for the rest of the article which looks at different types of debt and what to do with each after a divorce to keep your credit score in good shape.
So the good news is that although the actual divorce itself won’t show up in your credit history, the bad news is that your credit score could still get rocked due to joint accounts, mortgages, car loans, and other shared debt if both parties’ names are still on all of the accounts. If you are going through a divorce, you have my sincerest empathy as well as my encouragement to get the finances sorted out 100%, to save from any unpleasant surprises down the road.