Even though the obvious answer is that getting a divorce does not lower the Credit Score directly, it can always negatively affect the outcome. There are certain situations, in which you need to tread lightly if you want your credit to stay high. Here are the 3 most common ways a divorce can affect your credit score.
Joint Debt Will Still affect Your Credit Score
Divorce may be an emotionally draining experience. As a result, it is simple to overlook a credit card payment or a car loan obligation. But there is a greater reason why you are more likely to skip a payment on any debt you and your spouse have jointly.
While the judge settles who will be responsible for paying specific debts, the divorcees are still both responsible for their credit. Whether it is a mortgage or a loan, both parties should see to it that the installments are paid on time.
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Your Personal Income Gets Lower
If you have not been the main breadwinner in the family, after the divorce you might experience some financial troubles. This is connected to the fact that your personal income is lower than your ex-spouse’s.
As soon as the divorce is over, you need to make a budget for your expenses and payments. Get rid of any unnecessary expenditures unless your financial status allows you to have them. In any case, stay sure you will not fall behind with all your monthly payments.
Credit Limits Can Decrease Significantly
Credit card issuers frequently reduce credit limits when two incomes are reduced to one. You could find yourself in the over-limit danger zone if you have a lot of credit card debt.
To keep your debt-to-credit ratio in excellent shape, keep your balance low, do not borrow more than a third of your overall credit limit. Most importantly, take a look at your credit score before applying for another credit card.