Getting a divorce can affect one’s financial plan and requires that one reevaluate their financial planning for the future. Under North Carolina law, spouses must divide their marital assets equitably, and while this does not always mean equally, that is often the result.
When going through a divorce parties must think about how their actions could affect their credit score, and how they can limit any potential damage.
A recent report finds a correlation in divorce and credit score hits
It takes time to build up credit, and many aspects of one’s life can depend on that credit score, including potential mortgage and vehicle loans. For that reason, many people take pride in their credit score and work hard to maintain it.
CNBC reports that 38% of people in a recent survey stated that their credit score decreased after their divorce.
It is important to note that the divorce itself was not the reason for this decrease in any of these cases. Dividing credit card debts or closing accounts do not hurt one’s credit. However, the report found that actions individuals take before and during their separation and divorce could potentially affect their credit score.
What steps should individuals take to prevent this?
As individuals move forward after the divorce, they should be able to rely on their finances. So, what can they do to prevent a drop in their credit score?
- Review all of their financial accounts, including their credit accounts, before beginning divorce proceedings;
- Do not put themselves into credit card debt during this process;
- If spouses have a joint account, they should determine how they will move forward to pay it off and close the account;
- Determine how to divide their liabilities pertaining to credit accounts and make sure their name is removed from any accounts they will not be responsible for; and
- Keep an eye on one’s credit report and bills due throughout the divorce proceedings.
Navigating a divorce can be challenging. Monitoring one’s finances throughout the process can be even more stressful. Paying attention to details like this, however, can help individuals prepare for their life post-divorce.
In these cases, it is helpful for individuals to consult an experienced divorce attorney to protect both their finances and their futures throughout the process of their divorce.