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Will my credit score go down if my spouse and I divorce?

On Behalf of | Feb 6, 2023 | Divorce

It might be the case that, at least eventually, you will be in a better place financially once your divorce is finalized.

But you might still wonder what effect your divorce will have on your credit score, especially if you are looking to make a big purchase like an automobile or an even bigger purchase, like a home now that you are single.

Will my divorce show up on my credit report?

Thankfully, your divorce on its own will not show up on your credit report. So, you do not need to worry about that. However, certain decisions made during the divorce process and afterward might affect your credit score, at least temporarily.

For example, if you had an auto loan with your now-ex, the judge may have ordered your ex to take on that debt in your divorce decree. But, if your ex fails to pay what is owed on the auto loan, this failure to pay could impact your credit score since your name is still attached to the loan.

For this reason, you might want to remove your name from the auto loan. Doing so could affect your credit utilization ratio and through that, your credit score. But there are ways to rebuild your credit, and many find removing their name from an auto loan or other joint debt preferable to taking the risk that their ex will miss a payment.

Also, it is possible that you had to go into debt to keep yourself afloat during the divorce process and immediately after. You may have had to open a new credit card and take out loans in your name only. Doing this might affect your credit score, especially if you miss payments on these new debts.

So, it is wise to be careful with your budget both during the divorce process and afterward. You might also want to keep an eye on your credit score for any changes, as well as remove your name from joint debts. And remember, even a downturn in your credit score can be reversed with time.