How to Protect Your Credit in the Midst of Your Texas Divorce

 Posted on October 30, 2020 in High Asset Divorce

A divorce can often have a large impact on your finances. With attorney’s fees, filing fees, court costs, and the asset division process, costs can add up quickly. This is why it is so important to protect your finances during and after your divorce. Many people who are considering ending their marriage may wonder how their divorce will affect their credit score. This is especially concerning for those with high net-worth, who might be facing financial uncertainty for the first time in their lives.

Helping Your Post-Divorce Credit Rating

Having decent credit is extremely important, particularly when you are starting your new life as a single person. While getting a divorce will not automatically affect your credit score, there are ways a divorce can be detrimental to it.

Here are a few tips on protecting your credit score during and after your divorce:

• Close all of your joint accounts as soon as possible. This should be one of your first steps in protecting your finances during a divorce. If you have any type of joint accounts with your spouse—whether they are investments, checking or savings accounts, or credit cards—you should close them in a timely manner to protect yourself. Even if your credit card debt is allocated to your spouse, you could still be held legally responsible for repaying that debt unless you remove your name from the account.
• Keep paying all of your bills, even if you do not think you should have to do so. It is very important that you keep paying all of your bills during your divorce, or you could see your credit score start to drop. Until you separate all of your accounts, you must keep making payments on your joint accounts, or both you and your spouse will suffer a drop in your credit score. Even if you just make the minimum payments on things such as credit cards and auto loans, you will be in a much better position than if you paid nothing at all.
• Start building independent credit. Even if your divorce is not finalized yet, you might consider opening a credit card or other line of credit in your name only. This can help you to build credit that is just yours with accounts that only belong to you, rather than the joint accounts you used to have. Even if you just open a credit card at a department store or something similar, it will help your credit score immensely if you pay off the balance at the end of every month.

Let a Skilled Austin Divorce Attorney Help You With Financial Matters

There are many things that must be decided in a Texas divorce, but financial matters are one of the most important aspects to address. If you are in the process of a divorce, or if you are beginning to plan for the end of your marriage, you should talk with an experienced Austin TX high asset divorce lawyer who can help you protect your financial well-being. At Powers Kerr & Rashidi, PLLC, we have the knowledge, resources, and tools to help give you the best divorce experience possible. Call us today at 512-610-6199 to schedule a confidential consultation.

Sources:

https://www.experian.com/blogs/ask-experian/credit-education/life-events/divorce-and-credit/

https://www.huffpost.com/entry/dont-let-divorce-ruin-you_b_6737036

https://www.aarp.org/money/credit-loans-debt/info-12-2012/protect-your-credit-in-divorce.html