Divorce is a major life change that impacts more than just your relationship status — it can also take a serious toll on your finances, including your credit score. Amid all the emotional and logistical adjustments, protecting your credit might not be top of mind, but it's a critical step in safeguarding your financial future.
Here’s how divorce can affect your credit and what you can do to stay on solid financial ground.
How Divorce Can Impact Your Credit
Even though your credit report is individual, the financial entanglements of a marriage — shared debt, joint accounts, income shifts — can have ripple effects long after the paperwork is finalized.
1. Changes in Income
Splitting into two households often means going from dual income to single. Add in potential child support or alimony payments, and your budget may need a serious overhaul. Without a clear plan, it’s easy to fall behind on bills, which can damage your credit.
2. Joint Debts
Joint credit cards, car loans, or mortgages appear on both parties’ credit reports. If one person misses a payment, even accidentally, it can hurt both credit scores. And post-divorce, you might not even realize that an unpaid bill is dragging down your score.
3. Closing Joint Accounts
It might seem smart to close joint accounts quickly, but doing so can raise your credit utilization ratio if you’re carrying balances on other cards. Protect your credit during a divorce by finding every joint account, stopping new charges on them and making sure every joint bill keeps getting paid on time until it's closed or refinanced. Your divorce decree can say who pays a debt, but the lender can still come after both of you if both names are on the account.
"It's not fair." That's what I usually hear when someone finds out they're still on the hook for a joint card or loan that the divorce decree gave to their ex, and I understand why. It's also one of the most common surprises in a divorce, and it's much easier to prevent than to fix.
Why does a divorce affect your credit?
Divorce itself doesn't appear on your credit report, but the money changes around it do. Your income may drop, joint debts stay on both of your reports, and closing joint cards can raise the share of your available credit that you're using, which can lower your score. The Consumer Financial Protection Bureau, the federal agency that looks out for borrowers, also explains that a creditor can still collect from both people on a joint account, even when the divorce decree assigns the debt to one of you.
What should you do with joint accounts?
Work through these steps with your attorney:
- Make a list of every joint card, loan and line of credit, and my article on what to look for on your credit report during a divorce shows you how to find them.
- Ask your attorney before you close or freeze anything, because the timing can affect your settlement.
- Contact each lender in writing about closing an account to new charges or removing one of you, and keep copies.
- Take yourself off as an authorized user on your spouse's cards, and take your spouse off yours.
- Keep paying joint bills on time until each one is closed, refinanced or paid off, even if the other person is supposed to pay.
How do you watch for problems?
Check your credit reports regularly, which you can do for free every week at AnnualCreditReport.com. If you're worried about someone opening new credit in your name, a credit freeze is free and keeps new lenders from pulling your report until you lift it. If your ex doesn't pay a debt the court assigned to them, paying it yourself can protect your credit, and your attorney can tell you how to ask for the money back.
What does your credit mean for the house?
Your credit decides whether you can refinance the mortgage on your own, buy out your spouse or buy your next home. If you're thinking about keeping the house, have a lender look at your credit before the settlement is final, and read my article on what happens to the mortgage when you're divorcing. If keeping the house would stretch you too thin, my overview of whether you have to sell the house in an Illinois divorce lays out your other options.
I'm Megan Sullivan, a real estate broker and REALTOR® with Compass and a Certified Divorce Real Estate Expert (CDRE®) in Chicago, and through The Divorce Collab I can introduce you to lenders, attorneys and financial professionals who handle the parts I don't. My Divorce and the House FAQs answer the questions I hear most, and when you're ready, schedule a conversation with me.
Megan Sullivan is a Chicago real estate broker with Compass, a Certified Divorce Real Estate Expert (CDRE®), and founder of The Divorce Collab. She helps divorcing homeowners understand their property options and coordinate with their professional team. A North Side resident for more than 25 years, she also works with local buyers and sellers.
This article is general education, not legal, credit or financial advice.
