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How divorce may hurt a person's credit rating

People in Texas who get a divorce may also find that their credit rating is lower afterward. This could happen for a variety of reasons, some of which could be intentionally created by an ex-spouse.

For example, some individuals may simply struggle on a single income and fall into debt. Creditors might review people's records after divorce and lower their credit limits because of a decreased income. If one spouse keeps the home, that person may need to refinance, and the resulting larger debt burden could hurt his or her credit rating. After assets and debts are divided, one person may have a larger debt burden than the other individual. Both spouses' credit ratings could be affected if they start paying bills late due to the chaos of divorce.

Sometimes people may share accounts and might not prioritize taking their spouses' names off the accounts. This could lead to someone running up debts in his or her ex-spouse's name. In some cases, a person might not disclose debts that technically belong to his or her spouse as well, and the other person might not find out until after the divorce. Some people might actually refuse to pay the share of the debt they have been assigned. These types of incidents may be more likely to happen if the divorce becomes acrimonious.

Couples may be able to use an alternative dispute resolution method, such as mediation, to work out an agreement regarding property division, which might also reduce the likelihood that they will deliberately try to sabotage each other's finances. Whereas litigation is an adversarial process, mediation works toward a cooperative agreement with which both parties are satisfied. Even in Texas, a community property state in which marital property is supposed to be split equally, there may be room for creative solutions.

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