Divorce can always be full of many challenges for people who live in Pennsylvania and across the United States. From the emotional minefields of the end of a marriage to the financial and practical difficulties, there are a number of concerns for people going through a divorce. One of the more significant issues, especially for people who use credit frequently and value their high credit scores for low interest rates and strong mortgage approvals, is the impact divorce could have on their credit.
Divorce does not have to mean that a couple’s credit scores will take a dramatic drop. However, it can be important to prepare during the divorce in order to protect one’s credit score and be aware of the potential credit effects of divorce. If the marital home is to be transferred into the name of one person, it could require a mortgage refinance. This will involve a hard credit inquiry and could significantly change the debt profile of that person, although it would not necessarily impact his or her creditworthiness.
Of course, in many divorces, an individual moves from a two-income to a one-income household with separate living quarters. This can be one of the most substantial effects on each party in the divorce. There can be more significant problems when dishonesty or bad faith enter the proceedings. When someone does not disclose the extent of marital debt, it can continue to affect the other party. The same is true if ex-spouses continue to have access to each other’s accounts with the potential for ongoing impact on each other’s credit scores after the divorce.
People who are thinking of getting a divorce are wise to consider the financial as well as the personal impacts of the end of their marriage, particularly in a high-asset divorce. A family law attorney can provide representation and counsel his or her clients on matters of asset division as well as how to develop a financial plan for the future.