Can divorce hurt my credit score?

Divorce can be a painful experience, affecting just about every aspect of your life, including your finances. But this doesn't mean it will directly put your credit in danger. Divorce alone cannot hurt your credit score, but it can certainly affect it.

There is much that goes into a divorce, and the results are unique to each couple. These results come from such things as dividing assets and splitting shared bank accounts. Depending on how the finances were established, these factors may play a larger role in adjusting the credit score than one might think.

If you are in the process of a divorce, or soon to be, then here are some considerations to keep in mind so you can keep your credit in good standing and take proper steps if necessary should slight credit repair be required.

Regardless if you and your spouse kept a shared bank account or had several in each other's names, there are various ways in which divorce will play a role, even if minor.

"There are various ways in which divorce can play a role in your credit score."

Individual accounts
If you and your spouse each maintained accounts in your own names, then your ex-spouse's individual account will not affect your own. Divorce has no bearing on this at all. However, if, for example, your spouse had all of the bills in his or her name, then they are on his or her credit report as well.

Paying bills on time is beneficial in building your credit score, and if you were not the one paying the bills in your marriage, then you won't have any of that recent credit strength. However, Equifax noted some states have regulations in place that say any debt acquired during and surviving the marriage remains a joint debt. This is true even if the accounts were separate in each of your names.

Essentially, you could see debt on your credit statement that is in your spouse's name. In these instances, you and your ex-spouse need to work out a financial arrangement so these joint debts aren't left behind and slip by going unpaid. If this happens, then these are late payments regardless of the situation that will bring down your credit score. Make sure you fully understand which debts are in your name and plan for your payments accordingly.

It is also important to remember that if you have an individual account, you are still required to keep up with your bills during the divorce proceedings. Divorce takes an emotional toll, there is no denying that, but you can't allow the stress and busyness to take away from your duties. Make sure you keep up with your finances and keep your credit healthy.

Joint accounts
If you and your ex-spouse shared a bank account and it is now being split, there are still ways in which your half of the account can be affected. For example, during the divorce proceedings, the debt in a shared account will be divided. This means that you and your spouse will each be responsible for paying your portion. But, as Experian pointed out, this splitting of the debt doesn't break the original contract with the lender.

Even if you pay off your chunk of the debt on time, your ex-spouse's financial behavior can impact your credit score if he or she is not handling their responsibilities. If your ex-spouse consistently makes late payments, they will be reflected in your credit report. Again, make sure you and your ex-spouse both understand your situation.

Debt acquired during a divorce can still be considered joint debt after.Make sure you understand the terms of your debt after a divorce.

Divorce costs
There are some cases in which divorce can be a long and drawn out process. There are certainly some couples that are able to shake hands and go their own way. On the other hand, there are some couples who refuse to come to an arrangement and the process can take a toll not only emotionally, but financially.

If you are in a situation where court costs are putting you further into debt than you realized was possible, then make sure you are also putting together a plan to maintain your payments and keep your credit healthy.

According to Nerd Wallet, this is a common problem that can lead to many individuals relying on credit to supplement income. Don't let this happen to you. Be smart about how you spend your money and have a plan together for tackling your accruing debt. Keep in mind that by having a solid plan in place and sticking to it, you can pay down your debt on time, which will in turn build your credit score. If you need the boost coming out of your divorce, then start taking action right now to get your credit to where it needs to be.

Divorce won't impact your credit directly, but like any major life change, there are factors that you must prepare for.