Divorce can be a trying time on your credit as well as your finances and emotions.  A vindictive or spendthrift ex-spouse can incur debt on your joint accounts and destroy your credit rating during hte divorce process.  I fyou are not able to pay a joint account in full, inquire as to whether you can maintain a balance on the account after it is closed to prevent the situation from gettng worse. 

Tips for dealing with your credit during a divorce:

  • Get a copy of your credit report and familiarize yourself with everything in it.
  • Close all accounts that you do not need or use.
  • If you don’t already have one, apply for a credit card in your name while you can.
  • Close all joint accounts and credit cards as soon as possible.

Keep in mind that many of the courts in Texas have orders that prohibit accounts from being closed or limited while the divorce is pending.  So, either take these actions before the divorce is filed or you may need to seek court approval to do so. For example, see the Collin County Standing Order that applies to all pending divorces and my prior post on this topic: Collin County Texas Divorce Standing Order

Your credit report shoudl help you discover any outstanding debts that need to be addressed as part of the divorce process.  Consider using marital assets or funds to pay off joint debts so each spouse can start over with a clean slate.

Once the divorce is finalized, use credit cards sparingly.  To establish or maintain a good credit score, pay off balances on time every month. 

If you need to use credit for short-term liquidity, then you may be better off refinancing your home and avoiding balances on credit cards.  Benfits of home financing include deductibility of the mortgage interest and a lower interest rate.