Credit After Divorce: Shocking Truth About Divorce, Debt, Money & Property -

Credit After Divorce: Shocking Truth About Divorce, Debt, Money & Property

credit after divorce issues

Your credit report after a divorce may look like it got slaughtered and a divorce can also bring money, debt and property issues.

Divorce not only has an impact on credit, but also on debt, property and of course your stress. If you have gone through or are going through a divorce, I understand how tough it can be.

My parents divorced when I was a teenager and I also got divorced myself about 6 years ago. There were no children involved with my divorce which made it easier, but divorces are never fun. I’m now happily married and my wife and I have an amazing 11mo old daughter.

I understand how tough it can be and that is why these lessons are so important:

Lesson #1 Your Divorce Decree does not protect your credit after a divorce

When you are dealing with credit after divorce, you might be surprised that your divorce decree doesn’t protect you like you probably think. Here is a story directly from the FTC of an example that:

issues with credit after divorce

Here is the full FTC Credit And Divorce article 

So, there are two main types of credit accounts: individual and joint. If you have an account that is joint with your spouse or ex spouse, it reports on both your credit reports, regardless of what is on the divorce decree or what you 2 have arranged. That is why so many people get damaged credit after a divorce.

Lesson #2 Check your credit report during AND after your divorce

If you are considering, are in the process of or completed a divorce, you will want to access all three credit reports ASAP.

Accessing all three reports is important because some banks and loan companies only report to 1 or 2 of the credit bureaus. What does that mean???

Let me illustrate what this means and why it is so important.
If you access 1 of your credit reports and find that all your accounts on there are individual accounts, then it would seem you are in the clear, right?

But what is there is a loan that you don’t know about or forgot about that reports to one of the other 2 credit bureaus?

You would never know….


The payments have gone late because of your spouse/ex-spouse and now you have a collector calling your home AND work 20 times a day!

So you can see why it is crucial to access your 3 credit reports and look for any joint accounts.

There is only ONE website that truly offers your free credit report once a year. It is There is no membership fee and you do not need to put a credit card in.

Once you have your 3 credit reports, you want to find any accounts that report you being a joint borrower. Once you find them, you want to call the bank and request to have one of you removed. (Who ever is taking the responsibility)

Just so you know, by law the bank or loan place does not have to take one of you off the loan. (taking it from a joint account to an individual account) Many will be happy to do this, but some loans are very particular. Almost all home mortgages will require the individual to refinance the loan and get qualified under only their income, credit score, etc.

Lesson #3 Remove your name from the mortgage loan after the divorce if you are not living there.

Your mortgage should be your first priority. It is vital to not walk away from a divorce with the mortgage in both of your names if possible.

There are 3 main options you have when you have a mortgage with your spouse or ex-spouse:

Option#1: Refinance the house before divorce is done. If one of you is going to live in the house and the other is moving out, refinance the house asap. Credit seems to drop from all the impacts of divorce, so refinance as soon as possible to improve your chances of getting a new mortgage approval. Unfortunately, you can’t just call your mortgage guy to say, “Hey, I’m going through a divorce, can you take me off the mortgage?” The mortgage company will need to get the individual who is staying in the home qualified by themselves and that can be tricky sometimes.

Option #2: Sell the home. Try to sell the house before the divorce, especially if your ex is living in the house during the divorce. Understand that even if you agree to sell the house, but it happens after the divorce is finished, if your spouse misses payments while the house is in the selling period, it could impact your credit very badly.

Option #3: This  is a last resort and it’s to keep the house in both your names. If you have to do this and there is equity in the home, don’t take your name off the title. If you do that, you are removing your ownership of the property so you wouldn’t get any equity if the house is sold. Not only would you remove your ownership and chances of equity, but you’re still on the mortgage for the house. That would mean you lose all equity possibilities but still have the financial and credit ibligation of the mortgage loan!

Whether you are in a divorce or not, I always advise people to get all their loans individually unless they are not qualified for the loan by themselves (like a mortgage). It helps your lendability in several ways.

Lesson #4 You never know what will show up on your credit during a divorce

I have seen something happen to divorced men and women that shocks them and makes them sick.

In some occasions, one spouse will get loans secretly without the other spouse knowing. It is one thing if they do it in their own name, but unfortunately they also get the loan in the other persons name too.

I’m not saying your spouse or ex-spouse has done this, but I have run into this far too many times.

The other person knows their spouse or ex-spouses social security number, birth date and address. Most loan places require a signature, but not all of them do. I’ve seen instances where a spouse has forged their signature to get a loan.

It’s scary and it’s something you have to look out for when you start the divorce process.

It’s another reason, checking all three of your credit reports is so important.

I hope this helps to all of those with credit and divorce issues!


About the Author

Jeremy Maher dealt with harassing collector calls, debts piling up and damaged credit for years. He improved his situation and started helping others.   That leads us to today, where Jeremy has DIY solutions for stopping collection harassment, eliminating debt and improving your credit scores. His clients can improve their situation within the comfort of their own home.