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What makes a credit report important in divorce?

On Behalf of | May 17, 2021 | Uncategorized

You need as much peace of mind as possible in the divorce process. It is not always easy. Divorce involves not only the end of your married union but other aspects that will affect your future. For example, you should know that you will be in good enough financial shape to manage your post-divorce life. This is where your credit report comes in.

A credit report lists your credit score. This tells you if you have good credit. Having too much debt can negatively impact your score. If so, banks and lenders might look at you as too much of a risk to entrust with a loan or a mortgage.

Review your report

The Street explains that your credit report will list not only your credit score but your debts as well. This lets you identify what your debts are at the moment. You should have a good idea of how many debts you have so you have a good idea of how your financial future will progress. You may have to devote assets to paying off some debt to improve your score so you stand a better chance of getting a loan.

Also keep in mind the debt you share with your spouse. Joint loans and credit cards spread the liability to both spouses. You should know about these debts and consider how to separate yourself from them if possible. For instance, if you have a joint credit card, closing the account or removing yourself from it is essential so that your spouse does not rack up debt and leave you responsible for paying it off.

Take steps to protect your credit

Examining your credit report can also alert you to mistakes made on the report. You might find a debt or an account that you do not own. You have the opportunity in this situation to submit corrections to prevent damage to your credit score. Also, if you suspect your spouse might open new accounts in your name, you can ask for a freeze on your credit file.

Check your credit report again once your divorce is complete. If you have separated yourself from your spouse financially, certain accounts and debts should not show up on your report. You may have to correct the record to make sure your credit reflects your post-divorce status.