When it comes to divorce, most couples focus on the impact it has on their children, location of residence and income. This perspective makes sense considering these are immediate, life-changing consequences of splitting up a marriage.

However, other effects are just as important to be aware of to understand and prepare for them. One of these is your credit score. What exactly does divorce do to your credit?

Indirect impact

Simply filing for divorce does not automatically lower your credit score. Certain steps you take during the process may have a negative impact. If you have a highly-contested divorce, you will have a larger bill in the end, both from your attorney and from court fees. Using a credit card or loan to pay these expenses can hurt your credit if you do not pay them off quickly. Furthermore, dividing specific assets, such as the house, may also affect your rating. An income that is now lower due to asset division or child and/or spousal support payments may also hurt your credit.

Joint accounts

Another way your credit may change is by not closing joint accounts or removing one of the names from them. A divorce order may legally end your relationship, but it does not legally end other contracts you may have made with your spouse. You have to separate your finances on your own, otherwise, you can still be accountable for your ex’s financial choices, including debt. Creditors may pursue you if your ex does not pay off debts for accounts with which you are still associated.

Preparation

It is in your best interest to separate your finances as soon as possible, no matter what stage of the divorce process you are in. You may need professional help, such as from an accountant, to ensure you do not miss an account or to review options for those you cannot remove a name from.