Tag Archives: divorce credit score

How Can I Protect My Credit Score During My Illinois Divorce?

Wheaton divorce attorney for debt issuesGoing through a divorce can be stressful, and it can have a significant emotional and financial toll on your life. You may not necessarily consider how ending your marriage can affect your credit score until you see the effects of a decrease when applying for a loan or credit card.

Your credit score refers to a number that is based on an analysis of your credit information, and this number represents your creditworthiness. That is, your credit score reflects the probability that you will repay a debt or loan, such as a mortgage. According to FICO, which calculates credit scores in the United States, the amount of debt you have makes up 30 percent of your credit score. Therefore, the lower your debt, the higher your credit score. Protecting your credit during your divorce is essential for maintaining a secure financial future.

Tips For Protecting Your Credit

During your divorce, it is important to consider all the ways your finances may be affected. For example, if a joint account from your marriage is left open, your ex-spouse may miss a payment, default on the loan, or add to the balance owed. If both of your names are still on the account, you will be held responsible for the debt, even if you did not use this credit card or bank account.

If you are unable to pay a credit card balance in full, you should pay the minimum amount required, and make sure to do so on time. Try to avoid maxing out your credit cards, as that will put an additional burden on you to pay them off.

In some cases, people who are in the midst of divorce may want to spend money in an attempt to cheer themselves up, or it may be necessary to purchase new items such as furniture for a new home. Even though you might feel like treating yourself, you should rethink the temptation to splurge. You will not want to incur a large amount of debt that you may not be able to afford on one income.

Here are some other helpful tips for safeguarding your credit score during your divorce:

  • Close any joint bank or credit card accounts.

  • Refinance your mortgage or sell your home and divide the proceeds.

  • Keep paying bills on time.

  • Notify creditors/lenders about the divorce.

  • Get monthly statements on any outstanding accounts.

  • Avoid extravagant spending.

  • Use credit cards wisely.

  • Check your credit report regularly.

  • Place a “freeze” on your credit.

If your ex-spouse was ordered to pay certain joint debts in the divorce agreement, and he or she did not meet those obligations, you may want to pay those debts yourself in order to maintain a good credit rating. If necessary, you can go back to court to secure a judgment against your ex for not following the court’s orders.

Contact a Wheaton, IL Divorce Lawyer

Divorce can significantly impact your financial status. Whether it is due to losing the other spouse’s income or having to pay the expenses involved in moving to a new home, you may rack up a lot of debt. The Andrew Cores Family Law Group has handled many types of divorces, including high-asset or complex cases. If you are concerned about how your divorce will affect your credit score, our tenacious DuPage County divorce attorneys will work with you to determine the best way to keep your credit score intact. To schedule a free consultation, call our office at 630-871-1002 today.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2086&ChapterID=59

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

http://www.businessdictionary.com/definition/FICO-score.html

 

5 Steps to Take Before Filing for Divorce

DuPage County divorce attorney credit scoreWhether you and your spouse have discussed the possible end of your marriage in detail or you are silently debating your options, once divorce becomes inevitable, there are several steps you need to take to protect your interests during the divorce process. Before filing, set yourself up for success with these tips:

1. Begin Building Your Credit

Spouses often discover post-divorce that they have built up their spouse’s credit while neglecting their own. Without a good credit score, down payments for utilities and housing are often significantly higher, if you are able to get approved in the first place. Open a credit card now and use it to make small purchases that you can pay off each month. The goal is not to create a pile of debt; it is to prepare yourself for future success.

2. Understand the Family Finances

For property division and support payments, it is imperative to understand what you own and what you owe. Gather important documents like your credit report, paycheck stubs, tax returns, and bank statements. This information will not only help a judge determine whether you are eligible for spousal maintenance to cover your family’s financial needs, but it will also assist you in creating a post-divorce budget.

3. Prevent Revenge Spending

If at all possible, pay off and close any joint credit card accounts and open separate bank accounts. Inform creditors of the divorce. If you cannot pay off a card or loan, negotiate a deal to reduce the amount owed while you work to close the account. If neither of these is an option, freeze all accounts to prevent further usage.

4. Remember: You are Not Single Yet

Avoid partying, dating, or staying up until the wee hours of the morning, especially if kids are involved. As always, your children should be your first priority. Remember that divorce is stressful for them, too. How you conduct yourself during your case can affect the decisions made about child custody. If you have a romantic interest, it is often best to wait to pursue that relationship until after the divorce is final.

5. Contact a Divorce Lawyer

Do-it-yourself divorces never end up as quick and easy as they may seem, nor do they save money in the long run. Many of these cases result in long courtroom battles and repeated post-divorce modifications. Our suggestion is to speak to a proven DuPage County divorce attorney. At Andrew Cores Family Law Group, we can help you understand whether you may be able to use methods of alternative dispute resolution (ADR) such as mediation. This may help you reach a shorter and more amicable solution than a divorce through litigation, and it can empower you and your spouse to create your own divorce agreement. However, this avenue sometimes fails, and litigation in court becomes necessary.

Since 1996, our attorneys have been helping clients reach the outcome they need in both ADR and divorce litigation. We can help you understand your rights and requirements during divorce and work with you to reach a positive resolution to your case. Call our office today at 630-871-1002 to schedule your free, no-obligation consultation.

Sources:

https://www.familyeducation.com/life/deciding-divorce/21-things-do-asking-divorce

https://www.liveabout.com/things-to-do-before-you-file-for-a-divorce-1103072

How Divorce Can Impact Your Credit

DuPage County divorce lawyer credit scoreDivorce can cause a great deal of financial upheaval for a family. However, the divorce itself does not have a direct impact on your credit score. The divorce decree does not add or remove points from your existing number, but the financial outcome after the divorce can still play a significant role in what happens to your score. Here is what can go wrong and how to prevent damage to your score:

Responsibility for Joint Debts

Creditors want their money. They do not care if you got a divorce, nor do they care whether a judge proclaimed that one spouse is responsible for the balance on the joint credit card. If your name is on the account as a co-signer, an authorized user, or a joint account holder, you are also financially liable for these debts. The divorce decision does not negate the existing agreement you have with the lender.

Your Credit Score Is on the Line

If you share an account in any way with your ex, old or new, you are also legally responsible for the balance on that account. If the judge gives the responsibility to your ex, and he or she fails to make a payment, the negative marker will end up on your credit score, no matter how far in the past your divorce occurred. Your credit score may also be affected if your ex or someone else with access to a credit card runs up the balance on the account. Negative consequences affect all credit scores associated with an account, yours included.

Preventative Measures

A general rule of thumb is to close any joint accounts before the divorce process begins. Unfortunately, in some situations, a vindictive spouse may sabotage their former partner’s credit score by making large purchases with no intention of paying the balance. Closing accounts or removing a spouse from an account can help avoid this situation.

Other preventative measures you can take include maintaining an amicable relationship with your spouse throughout the divorce and working together with your ex to pay down credit card balances and ultimately close the accounts entirely. You may be able to work with lenders to pay the amount in full or settle for a lower total. You can also communicate with lenders to convert a joint account into an individual account. No matter your decision, it is best to clear up any loose ends as soon as possible, so you can begin rebuilding your credit once your divorce is finalized.

A DuPage County Family Law Attorney Can Help

If you are considering divorce and are worried about how the process will impact your credit score, the Wheaton divorce lawyers at Andrew Cores Family Law Group can answer your questions and address your concerns. Our experienced attorneys will walk you through the divorce process and advise you of how to protect your finances and your credit. Call us today at 630-871-1002 to schedule your free initial consultation.

Sources:

https://www.experian.com/blogs/ask-experian/how-divorce-can-impact-your-credit-scores/

https://creditcards.usnews.com/articles/ways-divorce-affects-your-credit