How Divorce Impacts Your Credit: What to Know

There’s no way around it: divorce not only takes an emotional toll, it takes a financial one as well. A 2024 debt.com survey revealed that divorce — or the circumstances surrounding it — lower some divorcee’s score by as much as 50 points.

This may be due to a number of factors: You may find that your income has been dramatically reduced, or you’re having to figure out managing debt that used to be shared.

Below, we’ll discuss some of the ways in which the divorce can affect your credit, and what you can do to minimize its effect.

Table of Contents

• Income changes
• Issues around joint debt
• Closing joint credit cards
• Minimizing the impact of divorce on your credit

Income changes

Regardless of whether you both worked and didn’t have any joint accounts, the simple fact is divorce affects your finances by going from two incomes to one. You may also have new payments, such as alimony or child support. This change in your financial situation may then trickle down to your other debt, causing you to miss or make late payments — or affecting your ability to make them in full.

Issues around joint debt

Joint accounts like credit cards, mortgages and installment loans are reported on both you and your soon-to-be ex-spouse’s credit reports. That means that if your former spouse defaults on payments, your credit will also be affected. The same goes for any new debt they may run up on a credit card, for instance.

Part of your divorce process will involve separating your joint debt, ideally in a way where neither of you takes on more than you can handle. Bear in mind that creditors and debt collectors don’t honor divorce decrees, so if your name is still on an account as more than an authorized user, you will be held responsible even after the divorce.

If your former spouse agrees to pay some debt and doesn’t, the creditor may begin a collection process against you. Likewise, missed payments on that debt will affect your credit history, and if your ex files for bankruptcy, debt may shift to you (if you have legal liability).

Closing joint credit card accounts

There are several things to think about if you want to close any joint credit cards you may have. Since you’re lowering your total available credit, your credit utilization ratio will likely go up and your score will be negatively impacted.

While you get your finances in order, try to keep your credit utilization low, at less than 30%. Further, if your partner had better credit history than yours and you depended on that to boost your own score, closing your joint accounts will probably result in a drop.

Whatever you decide with your ex, the account holder will have to call the relevant creditor to have the second user removed.

Minimizing the impact of divorce on your credit

While it’s highly likely that a divorce will impact your finances in some way, there are some steps you can take to minimize its effect.

Monitor your credit report

This tip applies to everybody, regardless of their marital status, but it can be particularly important when you’re going through a separation. You can check your free credit report every week at Annualcreditreport.com, and get reports directly from each of the three credit bureaus (Experian, Equifax and TransUnion) on an annual basis — the latter will also include your credit score.

Regularly checking your credit has several benefits: It gives you a better picture of what any lenders may see and allows you to monitor whether all the information on there is accurate and complete.

Your report will include your payment history, current and past credit accounts, and the total amount you owe to lenders as well as your credit limit. Credit reporting agencies use that information to determine your credit score, though each bureau will weigh them differently, according to their scoring model.

If you find inaccuracies in your report, you can either dispute them yourself or hire a credit repair company to do so for you.

Consider a credit freeze

While this may not be necessary for everyone, setting up a credit freeze during your divorce proceedings can help you keep control of your finances. Essentially, a security freeze restricts access to any new lenders or creditors. If you need to open a new account, you can pause the freeze temporarily or permanently.

Build up your credit history

Your credit history is one of the building blocks of personal finance. If you’re looking to boost yours, there are several options available to you — but remember, it will take time and effort.

1. Apply for new credit. If your own credit history is sparse, consider applying for a secured credit card or a credit-builder loan.
2. Make payments on time. Paying your bills on time, and in full (if possible) goes a long way to helping you achieve good credit.
3. Get your rental payments reported. Rent-reporting services can get your rental payments reported to your credit report, helping you establish a record of consistent payments.
4. Become an authorized user. If you were an authorized user on your spouse’s credit card, you can try the same strategy with a family member or friend.