How to Rebuild Your Credit After Divorce
Divorce can quietly devastate your credit score — even if you did everything right during the marriage. Joint accounts, missed payments, mounting legal fees, and an ex who stops paying shared debts can leave your credit in ruins. The good news: you can rebuild it. Here is exactly how, step by step.
Understanding What Happened to Your Credit
Divorce itself does not appear on your credit report. The word “divorce” will never show up on your Equifax, Experian, or TransUnion file. But the financial fallout of divorce hits your credit in multiple indirect ways that can be just as damaging.
Joint account missed payments
If either spouse misses a payment on a joint credit card, mortgage, or auto loan, both credit reports take the hit. Payment history accounts for 35% of your FICO score — the single largest factor. Even one 30-day late payment can drop your score by 60 to 110 points.
Increased credit utilization
Legal fees, moving costs, and the expense of setting up a new household often get charged to credit cards. Credit utilization — the percentage of your available credit that you're using — accounts for 30% of your score. Going above 30% utilization starts hurting. Above 50% is serious damage.
Closed accounts reduce credit history
When joint accounts are closed during divorce, you lose their credit history length. The length of your credit history accounts for 15% of your score. Closing a 10-year-old joint credit card makes your average account age drop significantly.
Authorized user removal
If you were an authorized user on your spouse's credit cards (or vice versa), those accounts disappear from your credit report once you're removed. If those were your oldest or highest-limit accounts, your score can drop substantially overnight.
Ex-spouse defaulting on assigned debt
A divorce decree may assign the mortgage to your ex, but the bank does not care about your divorce decree. If your name is on the loan and your ex stops paying, your credit suffers. This is one of the most common and devastating post-divorce credit problems.
Step 1: Pull Your Credit Reports from All Three Bureaus
Before you can fix anything, you need to see the full picture. You are entitled to one free credit report per year from each of the three major bureaus through AnnualCreditReport.com — the only federally authorized source for free reports.
Pull all three reports, not just one.
Creditors do not always report to all three bureaus. A missed payment might show up on your Experian report but not Equifax. A joint account might appear on TransUnion and Experian but not Equifax. You need the complete picture from all three.
When reviewing your reports, look for:
- ✓Joint accounts you may have forgotten about — store credit cards, old car loans, lines of credit opened years ago
- ✓Late or missed payments on any account — especially ones your ex was supposed to be paying
- ✓Accounts in collections you did not know about — medical bills, utilities from a former shared address
- ✓Accounts where you are still listed as authorized user on your ex's cards
- ✓Errors and inaccuracies — wrong balances, accounts that are not yours, incorrect payment status
Write down every account you find. Note which are joint, which are individual, and which have negative marks. This becomes your action plan.
Step 2: Separate Your Finances from Your Ex
As long as your name is tied to your ex's finances, their behavior affects your credit. The goal is full financial separation. Here is what to do with each type of account:
Joint credit cards
Call the issuer and request to close the joint account. Pay off the balance first if possible. Some issuers will let you convert a joint account to an individual account — ask. If you cannot close it immediately, request a freeze to prevent new charges.
Authorized user accounts
If you are an authorized user on your ex's account, call the issuer and remove yourself. If your ex is an authorized user on your account, call and remove them. This is usually a quick phone call — you do not need the other person's permission to remove yourself or to remove them.
Joint mortgage
The spouse keeping the house needs to refinance the mortgage in their name only. Until that happens, both names remain on the loan. If your ex was assigned the house in the divorce but has not refinanced, your credit is still at risk every month. Consider a deadline in your divorce decree — for example, “must refinance within 6 months.”
Joint auto loans
Similar to a mortgage — the person keeping the car needs to refinance the loan in their name alone. If refinancing is not possible due to credit issues, selling the car and paying off the loan is the cleanest solution.
Joint bank accounts
While bank accounts do not directly affect your credit score, close all joint checking and savings accounts. Open individual accounts in your name only at a different bank if possible. This prevents your ex from overdrawing the account, which could trigger fees or affect your banking relationship.
The Divorce Decree Does Not Protect Your Credit
This is the single most important thing to understand.
A divorce decree can assign specific debts to each spouse. But a divorce decree is an agreement between you and your ex — it does not change the original loan contract with the creditor. If both your names are on a loan, the creditor can and will pursue both of you for payment, regardless of what your divorce decree says.
This means if your divorce decree says your ex is responsible for the joint Visa card and they stop paying, the credit card company will report the delinquency on both your credit reports. You can sue your ex in court for violating the divorce decree, but by then the damage to your credit is already done.
The only real protection is to eliminate joint debt entirely — pay it off, refinance into one name, or negotiate with the creditor to release one spouse from the account. Do not rely on your ex to pay a debt that also has your name on it.
Step 3: Build Credit in Your Own Name
If your credit history was mostly tied to joint accounts or your spouse's accounts, you may be starting with a thin credit file. Some people — especially those who let a spouse handle all the finances — emerge from divorce with almost no credit history of their own. Here is how to build it.
Secured credit cards
A secured card requires a cash deposit (typically $200 to $500) that serves as your credit limit. Because the bank holds collateral, approval is easier even with damaged or thin credit. Use the card for one or two small recurring purchases — like a streaming subscription or gas — and pay the balance in full every month. This builds a perfect payment history. Most banks will upgrade you to an unsecured card within 12 to 18 months.
Credit-builder loans
These are small loans (usually $300 to $1,000) specifically designed to build credit. You make monthly payments into a savings account held by the lender. Once you've paid the full amount, you get the money back (minus a small fee). Every on-time payment is reported to the credit bureaus. Credit unions and online lenders like Self (formerly Self Lender) offer these.
Become an authorized user (strategically)
If you have a trusted family member or close friend with excellent credit and a long-standing account, ask if they will add you as an authorized user. Their account's positive history will appear on your credit report. You do not even need to use the card — just being on the account helps. Make sure the issuer reports authorized users to all three bureaus.
Store or gas station credit cards
Retail credit cards from stores like Target, Amazon, or gas stations tend to have lower approval requirements than major credit cards. They often come with high interest rates, so the rule is the same: charge small amounts and pay in full every month. Never carry a balance on these cards.
Report rent and utilities
Services like Experian Boost, RentTrack, and Rental Kharma can add your rent, utility, phone, and streaming payments to your credit report. If you are paying these bills on time anyway, this is free credit-building. Experian Boost reports to Experian only, but other services may report to all three bureaus.
Understanding Your Credit Score Factors
To rebuild effectively, you need to understand what actually moves the needle. Here is what makes up your FICO score, which is used by 90% of top lenders:
- 35%Payment history — The most important factor. Every on-time payment helps. Every late payment hurts. A single 30-day late payment can stay on your report for 7 years, though its impact fades over time.
- 30%Credit utilization — The percentage of available credit you are using. Keep this below 30% on each card and across all cards combined. Below 10% is ideal. Pay balances down before the statement closing date, not just the due date.
- 15%Length of credit history — Average age of all your accounts. This is why closing old accounts hurts and why it takes time to rebuild. Keep old accounts open if possible, even if you do not use them actively.
- 10%Credit mix — Having different types of credit (credit card, installment loan, mortgage) shows you can manage various obligations. A credit-builder loan alongside a secured card gives you a healthy mix.
- 10%New credit inquiries — Each hard inquiry (from applying for credit) can lower your score by 5 to 10 points. Space out applications. Do not apply for multiple credit cards at once. Hard inquiries fall off your report after 2 years.
Focus your energy on the top two factors: payment history and utilization. These account for 65% of your score and are the fastest to improve.
Step 4: Dispute Errors on Your Credit Report
Errors on credit reports are surprisingly common. The Federal Trade Commission found that one in five consumers had an error on at least one of their credit reports. After a divorce, errors are even more likely because of the chaos of separating finances.
Common divorce-related errors to look for:
- •Accounts showing late payments that were actually paid on time
- •Joint accounts still showing as open after being closed
- •Your ex's individual debts incorrectly appearing on your report
- •Incorrect account balances (especially on recently paid-off debts)
- •Accounts in collections that have already been resolved
- •Your ex's address or name mixed in with your information
You can file disputes directly with each credit bureau online, by mail, or by phone. Include supporting documentation — your divorce decree, payment receipts, account closure confirmations. Bureaus must investigate disputes within 30 days.
- 1.Equifax: equifax.com/personal/disputes
- 2.Experian: experian.com/disputes
- 3.TransUnion: transunion.com/disputes
Step 5: Refinance Joint Debts
Any joint debt where both names remain on the account is a ticking time bomb for your credit. Refinancing is the only way to fully separate.
Mortgage refinancing
If you are keeping the house, refinance the mortgage into your name only. You will need sufficient income and credit to qualify on your own. Factor in alimony or child support income — lenders can count this if you can document it will continue for at least 3 years. A quitclaim deed transfers ownership but does not remove your ex from the mortgage — only refinancing does that.
Auto loan refinancing
Credit unions often offer competitive auto refinancing rates, even for borrowers with lower credit scores. If neither spouse can qualify to refinance alone, selling the vehicle and splitting any equity (or debt) may be the best option.
Personal loans for joint credit card debt
If you were assigned a joint credit card balance in the divorce, consider a personal loan or balance transfer to move the debt into your name alone. This closes the joint account and gives you a fixed payment schedule. Many personal loans have lower interest rates than credit cards.
Step 6: Set Up Credit Monitoring
After divorce, you need to watch your credit like a hawk — especially while joint accounts still exist. Credit monitoring alerts you when something changes on your report so you can catch problems before they spiral.
- •Free options: Credit Karma (Equifax + TransUnion), Experian free account, Capital One CreditWise (TransUnion), most bank and credit card apps now offer free FICO scores
- •Paid options: myFICO.com ($29.95/month for all three bureaus), Experian Premium, IdentityForce, LifeLock — these offer more detailed monitoring and identity theft protection
- •Fraud alerts: Consider placing a free fraud alert on all three reports if you are concerned your ex may open accounts in your name. A fraud alert lasts one year and requires creditors to verify your identity before extending credit.
- •Credit freeze: For maximum protection, freeze your credit at all three bureaus. This prevents anyone (including your ex) from opening new accounts in your name. You can temporarily lift the freeze when you need to apply for credit yourself.
Check your credit score at least once a month during the first year after divorce. Track the trend. If it is going up, you are on the right track. If it drops unexpectedly, investigate immediately.
Budgeting on a Single Income
Rebuilding credit is not just about credit accounts — it requires consistent, on-time payments, which means your budget has to work. Going from a two-income household to one is often the biggest financial shock of divorce.
- 1.List all income sources: salary, alimony, child support, side work, investment income. Be conservative — only count what is reliable and consistent.
- 2.List all expenses: housing, utilities, food, transportation, insurance, minimum debt payments, childcare. Do not forget irregular expenses like car maintenance, medical copays, and annual subscriptions.
- 3.Identify cuts: Subscriptions you forgot about, dining out, impulse purchases. There is no shame in cutting back — this is temporary.
- 4.Automate minimum payments: Set up autopay for at least the minimum payment on every account. A single missed payment can undo months of progress. Autopay is your safety net.
- 5.Use a budgeting app: YNAB (You Need A Budget), Monarch, or even a simple spreadsheet. The tool matters less than the habit of tracking every dollar.
Building an Emergency Fund
An emergency fund prevents you from going further into debt when the unexpected happens — and after divorce, the unexpected happens a lot. A car repair, a medical bill, or an unreimbursed child expense can derail your credit recovery if you have to put it on a credit card.
Start with $1,000. Then build to 3 months of expenses.
A full 6-month emergency fund is the ultimate goal, but do not let perfection paralyze you. Even $500 in savings prevents many people from missing a payment. Automate a transfer of even $25 or $50 per paycheck into a separate savings account. It adds up faster than you think.
Keep your emergency fund in a high-yield savings account — not in your checking account where it is easy to spend. Online banks like Marcus, Ally, or Discover typically offer the best rates.
Timeline for Credit Recovery
Credit recovery is not instant, but it is also not as slow as most people fear. Here is a realistic timeline of what to expect:
Month 1-2: Assessment and cleanup
Pull credit reports, identify all accounts, dispute errors, close or separate joint accounts, set up credit monitoring. Open a secured credit card. Score may dip slightly as you close accounts.
Month 3-6: Building momentum
Consistent on-time payments start building positive history. Credit utilization decreasing as you pay down balances. Disputed errors being resolved. You may see a 20 to 40 point improvement.
Month 6-12: Visible progress
Six months of perfect payment history makes a real difference. You may qualify for an unsecured credit card. Score improvement of 50 to 80 points from the bottom is realistic. Joint debts are hopefully refinanced or paid off by now.
Month 12-24: Real recovery
A full year of positive credit behavior can recover most of the damage. You should be qualifying for mainstream credit products. Negative marks from divorce are fading in impact (though they stay on your report for 7 years, their effect diminishes each year). Many people reach a good credit score (670+) within this window.
Year 2+: Thriving
With continued good habits, you can reach an excellent credit score (740+). At this point, you qualify for the best interest rates on mortgages, auto loans, and credit cards. Your credit history in your own name is established and growing.
When to Seek Credit Counseling
Not everyone needs professional help, but there is no shame in getting it. A nonprofit credit counselor can make the process far less overwhelming — especially if you are dealing with significant debt.
Consider credit counseling if:
- •You owe more than you can realistically pay on your current income
- •You are being contacted by debt collectors
- •You are unsure which debts to prioritize
- •You are considering bankruptcy and want to explore alternatives
- •You need help negotiating with creditors
- •The financial stress is affecting your health or ability to function
Use only NFCC-certified nonprofit counselors.
The National Foundation for Credit Counseling (NFCC) at nfcc.org is the largest nonprofit credit counseling network in the US. Member agencies offer free or low-cost initial consultations. They can create a budget, negotiate lower interest rates with creditors, and set up a debt management plan. Avoid for-profit credit repair companies that charge large upfront fees and promise to “fix” your credit — anything they do, you can do yourself for free.
Common Mistakes to Avoid
- 1.Assuming the divorce decree protects you from joint debts. It does not. Creditors are not bound by your divorce agreement. Remove your name from joint debts as soon as possible.
- 2.Closing all your credit cards. This reduces your available credit and increases utilization percentage. It also shortens your credit history. Keep old individual cards open, even if you do not use them regularly.
- 3.Applying for too much credit at once. Each application creates a hard inquiry. Multiple inquiries in a short period signals desperation to lenders and drops your score. Space applications at least 3 to 6 months apart.
- 4.Ignoring your credit report. Out of sight, out of mind is dangerous. Your ex missing payments on a joint account can be silently destroying your credit. Monitor monthly.
- 5.Paying for expensive credit repair services. No company can remove accurate negative information from your credit report. Everything a credit repair company does, you can do yourself for free through the dispute process.
- 6.Co-signing new loans for anyone. After divorce, you need to protect your credit fiercely. Co-signing a loan for a friend, family member, or new partner puts your credit at risk again. Say no.
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Legal Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or credit advice. Credit laws and lending practices vary by state. The information above provides general guidance but your specific situation may differ.
Always consult with a licensed financial advisor or credit counselor for advice specific to your circumstances. If you are in immediate danger, call 911. For crisis support, contact the National Domestic Violence Hotline at 1-800-799-7233.