Married couples in Virginia may be keeping an eye on their credit score for a variety of reasons. They may be looking to buy a home, a new car or even something fun such as a boat or an RV. And, some simply want to be financially savvy when it comes to their own money, and will keep an eye on their credit score simply so they know where they stand. However, divorce is a reality that many couples eventually face. What they should know, however, is that getting a divorce can have an effect on their credit score due to a variety of circumstances.
For example, if during the property division process, one party chooses to keep the family home, they will need to refinance the mortgage to their own name. This means that their credit score will be looked at with much scrutiny, and it means that they could be incurring a lot of new debt. This can be compounded if, during the property division process, that party also took on a bigger share of the marital debts.
Also, in many cases both parties to a divorce will have to get used to living in a duo-income household to a single-income household. It is important to set up a budget from the get-go with this in mind, so that one doesn’t miss paying a bill due, which could harm their credit.
Unfortunately, sometimes parties to a divorce do not always play fair. They may try to hide assets during the property division process. It is important for each party to run a credit report, so they have an understanding of what credit accounts are out there with their name on it.
Ultimately, while divorce is generally not described as a “fun” process, the parties to a divorce should do what they can to take care in seeing that they act civilly. By trying to make sure that the property division process is done in a fair manner, and by having an understanding of what one’s financial life will look like post-divorce, a person can make it through to the other side with their credit intact.
Source: MarketWatch, “What a divorce can do to your credit,” Josh Smith, Dec. 28, 2017