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While your marital status does not influence your credit score, the implications of a divorce can cause a “ripple effect” on your overall financial situation, which may ultimately hurt your credit score. Read on for more information about important things to keep in mind about your finances in the midst of a divorce.

In many marriages, it’s most convenient for the couple to share ownership and management of everything, including their finances. Opening joint bank accounts, authorizing each other on credit accounts, co-signing on loans and/or leases — these are all extremely common financial practices for married couples.

But what happens in the case of a divorce? Does a divorce influence your credit score? Does a divorce hurt your credit score? What happens to the joint accounts once you are no longer married?

First of all, it’s important to remember that although joint accounts are most commonly opened by married couples, it is not required. Any two people can open a joint bank account regardless of their personal relationship, so any joint account that you and your spouse opened will remain a joint account after a divorce.

Note that opening a joint bank account — whether a checking account, savings account, or joint credit account — is different than adding your spouse as an authorized user on your personal bank account. The reason this is important is because while you cannot close a joint bank account or remove someone from a joint bank account without their consent, you can remove someone as an authorized user from a credit account.

This distinction is particularly critical when it comes to determining how your assets will be divided. Ensure you have a clear plan for how funds contained within a joint account will be distributed between you and your partner, as you’ll want to defund the account entirely and transfer your funds to your individual account(s). Otherwise, your ex-spouse will still have complete access to those funds; depending on the nature and circumstances of your personal situation, this may or may not be cause for concern.

Meanwhile, any credit debt you incur as a primary account holder is still your own responsibility after a divorce. Even if your spouse was an authorized user on your credit account, the account is still in your name and thus it is still your responsibility to make payments. If you added your spouse as an authorized user to your credit account and they used it exclusively for their own purchases, it’s important to discuss this with your attorney to ensure this debt is handled fairly in the divorce settlement.

While an authorized user on a credit account is not responsible for making payments, the account is still included on their credit report, which may have a positive or negative effect on their overall credit score depending on how this account compares to the rest of their report. In other words, if being added as an authorized user to a credit account changed your credit score, you can expect the opposite effect when you are removed.

Long story short, while a divorce has no direct, immediate impact on your credit score, it’s wise to review other financial factors that should be considered in the settlement proceedings. Working with an experienced divorce attorney ensures that you won’t find yourself in a troubling financial situation once the dust settles. Give us a call today to discuss your case!

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