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How divorce impacts a person’s credit and what to do about it

On Behalf of | Sep 22, 2020 | Family Law

The choice to get a divorce is often not an easy one, even when everyone involved agrees that it is for the best. Though many people understandably think about the emotional fallout of divorce, financial aspects are often overlooked. In particular, a person’s credit can take a serious hit, not because credit bureaus unfairly punish those who are divorced, but because the process of getting a divorce can drastically change a person’s finances. Experts have advice for those here in Alaska and elsewhere that want to preserve their credit in the event of divorce.

Divorce will mean both parties separating their finances, and both assets and debts need to be considered. Experts say that in the case of debt, spouses should request that the debt be transferred to whomever will assume control of it. In the meantime, any joint accounts should either be closed or have one person’s name removed, if he or she will no longer own that account after the divorce is finalized.

Avoiding future mistakes is also vital. Until joint accounts can be closed or changed, making timely payments is the best strategy so that neither person’s credit is negatively affected. It is a good idea to watch one’s credit report in case of any mistakes, which could happen when so much is changing.

The bottom line is that, whenever possible, the two spouses should make the effort to communicate with one another. This can help them both avoid any costly mistakes that could end up harming the finances of both people in the long run. If there is any uncertainty, a family law attorney here in Alaska can assist those going through a divorce and work to ensure that a divorce agreement is both thorough and fair.