Portrait of John K Grubb

Texas Divorce and Prenuptial Agreement

4550 Post Oak Place, Suite 201 • Houston, Texas 77027-3139

Phone: 713-877-8800 • Fax: 713-877-1229

5 Tips to Protect Your Credit Score You Shouldn’t Ignore In Divorce

Divorcing your spouse doesn’t mean that you also divorce your creditors. You’ve probably heard the Houston horror stories about a spouse agreeing to pay off the VISA, MasterCard, and Discover cards at the time of the divorce. Then, when the other spouse tries to open accounts in his or her own name, he or she finds out that the cards weren’t paid off.

Unfortunately, court orders don’t wave a magic wand and make your credit obligations disappear. They can’t keep your ex-spouse from acting maliciously or irresponsibly. Despite popular belief, a court order for your spouse to pay off the credit cards doesn’t mean that you aren’t liable if he doesn’t.

This can happen to you, and you will be denied credit or not be able to secure reasonable interest rates. Most divorcing couples know to

  • Close all joint accounts because if accounts remain in both your names, both parties responsible for past and any new debt on the account.
  • Get monthly statements from your bank and creditors on any accounts you couldn’t close or wanted to keep open. Monthly statements give you a record of your balance at the time of your divorce and let you keep track of future payments and charges.
  • Avoid shopping for revenge because high credit card balances may be hard to pay off in the future, hurt your chances of new credit in your own name, or the Houston Family Court may order you to assume the debt.
  • Use credit wisely, making sure you can meet your payment obligations. Approximately 30% of your FICO (Fair Isaac & Co.) score is calculated on how much credit debt you have and your payment history. Credit bureaus only care about past due payments, so if your spouse doesn’t pay, your credit is affected.
  • Freeze accounts you can’t close because freezing prevents your ex from using your social security number and opening new accounts in your name.

Additional Tips to Protect Your Credit Score

There are some small additional steps that you can take to protect your credit score after you divorce. These actions are often overlooked, because in all the chaos and emotional stress of divorce, they may fall through the cracks.

  1. Get a credit card with a low limit in your name. Cards with low limits prevent you from overspending and let you pay off your balance every month. On time payments help raise your credit score.
  2. Notify your creditors and your bank about your divorce after you close your joint accounts and remove your spouse as an authorized signor on your individual accounts in writing using certified mail. Certified mail assures you that someone in your creditor’s or bank’s office received notice.
  3. Don’t keep your home if you can’t afford it. Yes, you might want to hang onto your marital home to give your children a sense of normalcy. If you decide to keep the home, refinance it under your name only.
  4. Keep your address up to date. Not only should you inform the bank and your creditors of any address change before or after your divorce and move out, you should submit a change of address to the USPS. This is easily done online. Notifying the post office ensures any important mail such as bills, legal documents, and W-2s you anticipate receiving will go to your new address.
  5. Get a copy of a credit report in your name in addition to the joint credit report at the time of your divorce. You are entitled to a free report from the top three credit companies Equifax, Experian, and TransUnion once per year. Make sure that you correct any errors contained in your individual report.

Divorce is a sensitive and stressful time. But if you take care to protect your credit score, you will be on your way to recovery.

John K. Grubb & Associates, P.C.
Houston Divorce Attorneys

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