How Divorce Can Impact Your Credit Scores

Dear Experian,

I read that divorce does not impact your credit scores, but I've heard from people who are divorced that said it damaged their credit. If it doesn't impact your scores, how does it damage your credit?


Dear BEL,

Divorce proceedings don't affect your credit report or credit scores directly. Rather, the financial issues that are embroiled in the divorce process often involve joint credit accounts, and those very much affect your credit history and credit scores.

Joint Accounts Will Still Appear on Your Credit Report

Accounts are reported for each individual associated with that account, so if you are listed as a joint owner, cosigner, or authorized user, you must deal with that account prior to the divorce. That means closing the account completely or ensuring that one name is totally removed from the account.

Many divorcing couples are confused by the role of the divorce decree. A divorce decree may specify who is responsible for accounts opened during the marriage, but it doesn't break the contracts with the lenders.

If the spouse responsible under the divorce decree is unable or unwilling to pay and the contract has not been changed by the lender, the late payments still will appear on both credit reports and will have a negative impact on credit scores for both individuals.

The missed payments can occur years after the divorce and still will be reported for all individuals associated with the account. That certainly can be an unpleasant surprise if you haven't dealt with the account appropriately.

In some cases, vindictive behavior during the divorce by one or both spouses can have a very direct, very negative impact.

Sadly, an angry spouse may try to hurt their soon-to-be former wife or husband by making large credit purchases on joint accounts with the intent of punishing the other person with huge debts or wrecking their credit history.

What they usually do not understand is that by doing so they also likely will destroy their own credit history at the same time.

How to Deal with Joint Accounts During and After Divorce

If at all possible, maintain a civil relationship during the divorce process so that you can avoid the pitfalls of a vindictive split. Working together to pay off and close existing joint accounts is the best possible approach. If that is not possible, try to convert the account to an individual account when possible. Contact each creditor and explore the options available with that lender.

Doing so will help you make a clean separation without financial burdens that could haunt you even after the divorce is final.

Thanks for asking.
Jennifer White, Consumer Education Specialist