Does a Divorce hurt your credit score?

[TopGun]

My ex and I had an excellent credit report, over 800, before we divorced.  Does a divorce affect my credit score?  TG

[TC]

The divorce itself will not hurt your score...but if your ex does not keep up with the bills and your SSN is associated with her that could reflect and vice versa.

TC

[TopGun]

TC, I have canceled every joint account we had together.  Now I have found out that was probably not a wise thing to do.  I have never been a credit card user, like she was, so I didn't think much about it until I started to read some articles that you should keep some type of credit for yourself.  I was just needing some pointers.  TG

[TC]

Go get a card in your own name....it will help build/substantiate your credit and come in handy if you find yourself in an emergency situation.

If you have separted yourself from all joint accounts with the creditors, then there should be absolutely no adverse effect on your credit score due to the divorce.

TC

[livealittle]

TC, I have canceled every joint account we had together.  Now I have found out that was probably not a wise thing to do.  I have never been a credit card user, like she was, so I didn't think much about it until I started to read some articles that you should keep some type of credit for yourself.  I was just needing some pointers.  TG

your credit score is based on several things. One of those is the ratio of the amount of debt you can take out to the amount of debt you hae. For exampe if you have 10 credit cards and you can charge 1,000 on each that gives you 10,000 of debt you can take out.

let's say you have a total of 1,000 charged on them. That's a ratio or % of 10% of your current debt availability used.

let's say 5 of them were joint with your spouse with no balances on them. You have canceled those cards, now your debt ratio for just this part of the equation is 20% or it's just doubled. This can lower your score.

Here is an explanation of what is typically used to determine a credit score

The primary factors used to calculate an individual's credit score are his or her credit payment history, current debts, time length of credit history, credit type mix and frequency of applications for new credit. Because the scoring systems are based on different criteria which are weighted differently, the three major credit bureaus in the U.S. (Equifax, TransUnion, and Experian) may issue differing scores for an individual, even though the scores are based on the same credit report information.

this is from http://www.investopedia.com/articles/00/091800.asp

I suggest reading Dave Ramsey's books Total Money Makeover and Financial Peace. He writes about like we do on here and is very easy to read. Gives you a wealth of information as well as letters to credit bureaus should you need to dispute something, budget forms, etc.

[TopGun]

Thanks again Livealittle.  I will read up on this article and maybe look into the book.  TG

[Wolfy]

I can tell you that my credit rating took a hit when we divorced because we missed some payments while going through it. I think it went down to about 650. I have no credit cards, just a debit card. I have made every payment (bills, mortgage, etc.) on time since getting divorced and my credit rating is now in the mid 700s.

[TopGun]

Wolfy, I just got a debit card at the beginning of 2010.  I had always allowed my ex do the bills and such, so this was a big step for me.  But they are so simple to use, even for someone like myself.   I have made purchases on-line and at Wally World and such, so I think by using the debit/credit card, as you have, I will keep my credit score up.  Livealittled gave me the three most used Credit Score providers, but when I get on-line to their "free" credit score promotions, I never actually get my score.  It did show me my credit history, but not my score.  How do you actually get your credit score number?  TG

[livealittle]

Wolfy, I just got a debit card at the beginning of 2010.  I had always allowed my ex do the bills and such, so this was a big step for me.  But they are so simple to use, even for someone like myself.   I have made purchases on-line and at Wally World and such, so I think by using the debit/credit card, as you have, I will keep my credit score up.  Livealittled gave me the three most used Credit Score providers, but when I get on-line to their "free" credit score promotions, I never actually get my score.  It did show me my credit history, but not my score.  How do you actually get your credit score number?  TG

that's more tricky.  You should check your credit history report to verify all your accounts are reported correctly and that no accounts are on there that aren't actually yours.

You generally can't get your score from the free credit reports available at

annualcreditreport.com

but some of the pay sites will give it to you.

[Gus]

There's a couple sites Clark Howard (financial guy on the radio and TV  clarkhoward.com) recommends for getting your actual score. One of them is Quizzle.com (its free), which will give you a credit history and a score. I'm not sure how acurate it is, but it should give you a ballpark.

[TopGun]

Gus, thanks for your input. I listen to Clark Howard anytime I can.  I appreciate you taking time out to post this information.  TG

[InDenial]

I'm no expert on this, but I wonder whether a debit card will establish a "credit" history.

As I understand it, debit cards don't show that you are taking on debt and paying it off successfully. They are really just the same as a check. 

Paying your bills on time helps your credit score of course, and so if the debit card allows you to do that, more power to you. I pay my bills with checks and online banking, and I suspect that from the credit bureau point of view, these 3 things  (checks, debit card, online bill pay) are identical.

I think a true credit card could be a wise idea if you want to take out a mortgage some day.  I have two different friends with excellent salaries and spotless bill payment histories.  But because they didn't have prior car loans or credit cards, they both encountered some difficulties getting mortgages. They found it bewildering that because they'd alway lived within their means and never borrowed, some banks didn't trust them with a home loan.  But they were told this is how the credit system works. 

If you are capable of using your debit card without overdrawing, you can use a credit card the exact same way.  If you pay off your credit card in full every month, you don't pay any interest but apparently it helps with the credit history.

[Jade]

Wolfy, I just got a debit card at the beginning of 2010.  I had always allowed my ex do the bills and such, so this was a big step for me.  But they are so simple to use, even for someone like myself.   I have made purchases on-line and at Wally World and such, so I think by using the debit/credit card, as you have, I will keep my credit score up.  Livealittled gave me the three most used Credit Score providers, but when I get on-line to their "free" credit score promotions, I never actually get my score.  It did show me my credit history, but not my score.  How do you actually get your credit score number?  TG

Using a debit card (even when it is used as a credit card) will do nothing to your credit score.  What impacts your credit score is actual debt.  Such as a car payment, mortgage and credit cards. 

[Jade]

TC, I have canceled every joint account we had together.  Now I have found out that was probably not a wise thing to do.  I have never been a credit card user, like she was, so I didn't think much about it until I started to read some articles that you should keep some type of credit for yourself.  I was just needing some pointers.  TG

It absolutely was the smart thing to do.  If you had kept them open, your ex would have been able to use them.  And if she doesn't pay on the debt, then not only will it impact your credit rating, the creditors will come after you for payment. 

[TopGun]

Indenial and Jade thank you both for the information.  My debit card is also a Visa Card, so I do use it for credit also.  I will figure this all out soon enough.  TG