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Will your divorce show up on your credit report?

Since 1989, Americans have had to deal with credit scores. Your score, which a few credit bureaus compile, tells lenders whether you are likely to pay back the money you borrow. Consequently, virtually all financial institutions consider your credit score when deciding whether to extend credit.

While a credit score provides a snapshot of your creditworthiness, a credit report offers an in-depth look at your credit history. According to Equifax, your divorce will not appear on your credit report. Still, your divorce might affect your credit score in a few different ways.

You might still owe your creditors

Even though your divorce decree ends your marriage, you continue to be responsible for any credit cards, loans and lines of credit you have with your ex-spouse. This is true even if you and your ex-spouse have an agreement to the contrary. Therefore, to protect your credit score, you should be sure to close joint accounts.

You might have less available credit

If you and your ex-spouse had joint credit cards, your divorce may cause your credit limit to drop. That is, the issuing bank might lower your available credit after considering only your income. If you have outstanding balances, this might put you over your credit limit.

You might see a drop in your credit score

Much of your credit score comes from your credit utilization ratio, which compares the amount of credit you are using to the amount you have available. If your credit limits drop, your credit utilization ratio might increase. This, of course, could cause your credit score to fall.

Ultimately, to protect your credit score during and after your divorce, it is advisable to review your credit report regularly.

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