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Divorce and your credit score: Mitigate the impact

Divorce is not cheap, which is one of the many reasons why it is only chosen as a last resort. Your circumstances and choices will have a big impact on cost. For example if you have a contested divorce where your spouse fights tooth and nail for every cent, then it can cost you. If you skip out on attorney costs and go with a cheap option then you might end up losing more money in the end. If you do not plan for the expenses in divorce then it could have a big impact on your credit score.

Getting behind on payments

Most people underestimate the cost of divorce and therefore do not properly plan. This means that their car payments or mortgage payments will go unpaid for a few months. If you miss payments on loans then it will hurt your credit. Failure to make payments might also simply happen out of confusion. While you and your spouse get your accounts and bills straightened out, it might get confusing as to who pays for what. This can easily lead to missed payments.

A vengeful spouse

An angry soon-to-be-ex spouse can do a lot of damage to your credit score. They have access to your bank and are likely linked to a joint credit card. If they are feeling vengeful then they could start making frivolous purchases with the touch of a computer button. They could try to empty your bank account as well. If you end up with massive purchases on your card and an empty account then your credit score will soon drop.

Take steps to protect your credit

If you want to protect your credit score through a divorce then you will need to take action. First of all you should separate all joint accounts as soon as possible. This will restrict their access to minimize any damage done to your savings or credit. Try to talk with them about dividing the accounts and closing them. If this does not work then withdraw no more than half of the account balance.

Next you should figure out a budget for separate living expenses. Find out the average rent in your area and start saving. Plan for time off work and moving expenses. Remember that things like groceries, electricity and vehicle loans were all taken care of with a two salaries before. You will need to factor in all of these costs in order to create a solid budget.

Finally invest in an experienced attorney. Although there will be some expenses it will be worth it in the end to protect your estate. If your spouse had a chance to do damage to your joint accounts then they can make a case to prove their vindictive behavior. A good attorney can help you keep your finances stable during this tumultuous time.

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