One Mistake During Divorce Can Lower Your Credit Score for Years
Divorce is often thought of in terms of custody battles, property division, and emotional strain. What many people don’t realize is that divorce can also have a lasting effect on their financial stability—particularly their credit score. A single mistake during or after the divorce process can cause long-term damage, lowering your score and making it harder to move forward financially.
A strong credit score is more than just a number. It influences your ability to qualify for a mortgage, refinance loans, rent an apartment, or even get favorable insurance rates. Protecting your credit during divorce is essential if you want to rebuild your life without unnecessary financial obstacles.
Why Divorce Affects Credit
The divorce itself does not appear on your credit report. What matters is how debts are managed during and after the process. Divorce decrees divide responsibility between spouses, but creditors are not bound by those court orders. If your name is on a loan, a credit card, or even a utility account, you remain legally responsible for it—even if the judge orders your ex-spouse to pay.
For example, imagine the court orders your ex to keep paying the mortgage. If they miss a payment, the late notice will appear on your credit report as well. That single missed payment could drop your score by dozens of points, and if it continues, you could even face foreclosure.
This risk applies to every type of joint debt:
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Mortgages and car loans that have both names attached
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Joint credit cards that remain open during or after divorce
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Shared medical bills, utility accounts, or store credit cards
The bottom line is simple: the court can divide debts, but creditors only see names on contracts.
Common Mistakes That Harm Credit
During the stress of divorce, it’s easy to overlook financial details. Unfortunately, even small oversights can cause major harm to your credit. Some of the most common mistakes include:
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Leaving joint accounts open. Many people hope their ex will stop using the card, but as long as your name is attached, new charges or missed payments affect you too.
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Failing to refinance shared loans. Mortgages and car loans often remain in both names, creating years of potential risk if one person stops paying.
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Assuming court orders protect you. Judges decide who should pay, but lenders don’t honor those orders. They pursue anyone listed as responsible.
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Overlooking smaller accounts. Utility bills, medical expenses, and old store credit cards are often forgotten until they go unpaid and damage your report.
These mistakes may seem minor in the middle of a divorce, but they can drag down your credit for years. And once your score drops, rebuilding it is a slow process.
Steps to Protect Your Credit During Divorce
The best way to protect your credit is to be proactive. Don’t wait until missed payments show up on your report—take action early in the divorce process. Here are key steps every divorcing spouse in New Mexico should consider:
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Close or freeze joint credit cards. Prevent future charges that could put you on the hook.
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Refinance loans into one spouse’s name. If one person keeps the home or car, the loan should be transferred fully into their name.
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Pull your credit report regularly. Review it for unfamiliar accounts, missed payments, or debts you thought were resolved.
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Communicate directly with creditors. Let them know what’s happening and ask about options before payments are missed.
These steps may not eliminate every risk, but they significantly reduce the chance of long-term damage.
Why This Matters in the Long Run
Divorce is meant to give both spouses a fresh start. But if financial ties aren’t handled carefully, you could remain tied to your ex’s choices for years through joint debts. Every late payment, every overlooked bill, and every joint account left unresolved has the potential to drag down your score.
Your credit is not just about borrowing money. It’s a reflection of your financial reliability. Landlords, lenders, and even employers may look at your credit history when deciding whether to work with you. That’s why protecting your credit during divorce is about more than numbers—it’s about securing your independence and protecting your opportunities for the future.
How Genus Law Group Can Help
At Genus Law Group, we know that financial stability is one of the most important parts of moving forward after divorce. Our attorneys don’t just fight for custody and property rights—we help clients structure settlements that address debts in practical, realistic ways.
By planning ahead, you can avoid costly mistakes and ensure that divorce doesn’t damage your credit for years to come.
Take the First Step Toward Protecting Your Future
If you are facing divorce in New Mexico, don’t overlook your financial health. Call Genus Law Group at 505-317-4455 or reach out through our website. Our team will help you divide debts wisely, protect your credit score, and give you the tools to move forward with confidence.
