Will a Divorce Affect Your Credit?
Worrying about your financial situation while going through a divorce can add stress to an already difficult situation. You might know people who have experienced damage to their credit after a divorce, which is certainly caused for concern. It’s important to understand that the actual legal act of a divorce will have no impact on your credit score, this is because your marital status is not factored into your credit rating. While the legal dissolution of a marriage does not affect your credit score, certain actions that you or your partner display during the course of the divorce very well could.
How A Divorce Could Impact Your Credit
Although the actual act of a divorce will not immediately cause a dent in your credit, there are other financial factors that might. A divorce is a life=-changing event that involves the splitting of assets. This could mean a change in income, loss of property and other causes of financial strain. If you neglect your standard monthly bills, are unable to afford a mortgage payment, and can’t pay off other recurring debts, your credit will take a hit. There is a reason that people say divorce is expensive. Understanding how to protect your credit during this time is essential to maintaining financial health.
Ways To Protect Your Credit While Going Through A Divorce
First of all, it is important to understand how a credit score is determined. There are two key factors that the creditors look at, these are payment history and debt to income. Here are two specific ways to protect your credit:
- Pay your bills in full and on time. If you have maintained a consistent payment history on all of your outstanding debt, you’re in a good position. Don’t let yourself get behind on your payments. If you need to drop your monthly mortgage payment to the minimum amount, that is fine. Just make sure that you are paying at least the minimum amount due on your debts and that you are submitting the payments on time or ahead of schedule.
- Don’t take on any additional debt at this time. During the emotional turmoil of a divorce, it might be tempting to make big purchases like a new house or a new car. You’re in the process of breaking away from an old relationship and want to start fresh. One of the biggest mistakes that people make is to take on additional debt while going through a divorce. Until you have settled the terms and established what your actual monthly income will be, taking on new debt that you might not be able to afford down the line can be a huge negative hit to your credit.
Call a Texas Divorce Lawyer Today
If you are going through a divorce or planning to begin the process, a divorce lawyer can help. Divorce can be an emotionally and financially difficult time, and you want to resolve this as quickly as possible. The skilled Sugar Land, Texas divorce attorneys at The Vendt Law Firm are available and ready to help you navigate these waters and reach a resolution. To schedule an initial consultation to discuss the details of your case call us at (832) 276-9474 or write to us online using our contact form.