Facts About Credit and Divorce

Your credit is one of your most valuable assets, a financial measure that helps institutions decide whether to loan you money. A healthy credit report allows you to buy a car, secure a good mortgage rate, and have more financial freedom.

For the most part, you can maintain a positive credit report and a good credit score. You control this through your spending habits, namely by paying bills on time and not overextending your finances.

During divorce proceedings, however, credit problems can affect even those who diligently manage their finances. Whether through spiteful action or innocent error, mismanaged credit accounts leave a negative wake. We touched on this topic in a recent series of podcasts with Attorney Jim Smith but we wanted to dive into a bit more detail here.

Your credit report is a personal document

To avoid problems with your credit report, it’s important to review the document regularly and understand what it contains. A credit report is a record of your current and recent debts related to loans, credit cards, and other formal financial obligations.

On your credit report, you’ll find a list of all open and recently open lines of credit to which your identity is attached, including mortgage loans, auto loans, bank loans, educational loans, and credit cards. Detail is provided about each loan, showing some of its terms, the outstanding balance, and the monthly payment amount.

Your credit report also reflects any active liens against the property you own, legal judgments against you, and bankruptcies you have experienced.

Your payment history for each loan is also displayed on your credit report. Institutions examining your credit report can see how diligently you repay debts, and use this information to determine whether and how much credit they’ll extend to you.

Why credit matters in divorce

Divorce introduces a number of life transitions, possibly including changes in your home address and vehicle ownership, and the establishment of financial independence. People in divorce may need to apply for new lines of credit, making it critically important for them to protect their credit during this time.

To set up your new life, you’ll likely rent an apartment, apply for a home mortgage or buy a new car. Your credit will be examined in any of these scenarios, and a negative report could impact your ability to move on with important transitions.

When it becomes clear that a couple are headed for divorce, each person also must protect their finances by understanding what lines of credit they share and then severing them as soon as possible. Shared open accounts such as credit cards are vulnerable to abuse by one or both partners as they move through divorce proceedings.

If one person makes excessive charges on a shared credit card during a separation, both partners are responsible for that debt. Even if a divorce decree places the debt solely upon one of the parties, the debt won’t disappear from the other party’s credit report. 

Protect your credit during divorce

Getting divorced puts you in a financially vulnerable position, and your credit is at risk of being damaged. Especially if your ex-spouse harbors malicious intent, you need to protect your financial well-being.

  • Remove your name from joint credit card accounts. This does not erase the debt, but it separates you from future charges.
  • Monitor your credit report for new charges.
  • If your divorce decree indicates your ex-spouse must pay the credit card bill, be sure they do so. If they fail to, you can be held responsible. The terms of a divorce decree are irrelevant to a credit card company.
  • Run a credit report at the start of your divorce and at least before the divorce decree is issued.

Your ex-spouse may be in possession of all your personal information, so continue to monitor your credit report for new credit accounts opened up in your name. Though they might think it’s a good way to seek revenge, this illegal action is identity theft and should be reported to the police. 

You can pull your credit report for free once per year at www.annualcreditreport.com.

Your credit is a valuable asset and if you have concerns about this issue, review the same with your attorney and seek help.

We’re Here to Help

Whether you are a current client or if you are looking for family law or estate planning assistance, our team is here for you to address your concerns.

To the extent possible, we will offer remote consultations and provide services from a distance.

You may message us here, complete the form below to email our office, or call 815-600-8950 and one of our team members will be able to assist you.


This is a legal advertisement from Sterk Family Law Group. It does not constitute legal advice and should not be construed as such. This article is for informational and educational purposes only.

Recent Posts

Recognizing the Red Flags of Domestic Violence

Domestic violence affects millions of people around the world. It can happen in any relationship and to people of all ages, genders, and socio-economic backgrounds. Physical violence is by far the most common form of domestic violence, but it is not the only form....

Social Security Benefits for Spouses

Social Security benefits help individuals and their families maintain a steady income after retirement. Whether you're nearing retirement age or  planning ahead, understanding your benefits is important for making the most out of your retirement years....