How does divorce impact your CIBIL score? Here are 4 primary ways in which it affects your figures
Divorce itself doesn’t directly impact your CIBIL score. But what if you have a joint account with your ex-spouse, or you took a loan keeping her/his income in mind? Or perhaps the process of divorce left you high and dry, thus impacting your ability to service the outstanding debts in immediate future.
These factors, in totality, can certainly impact your CIBIL score in more ways than one.
Joint account: If you have joint accounts with your spouse and those accounts have outstanding debts or missed payments, they can affect both of your credit scores. Even after divorce, you may still be responsible for any joint debts until they are fully paid off or refinanced into individual accounts.
High alimony: Divorce can often lead to financial strain due to legal fees, alimony, and division of assets. This financial cost could impact your ability to service debt and make timely payments, thus leading to missed payments or increased credit card balances, which can negatively affect your credit score.
Changes in income: After divorce has taken place, your income situation may change and that can affect your ability to manage debt and make timely payments.
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Credit accounts in ex-partner’s name: If you were earlier an authorised user on your spouse’s credit accounts and those accounts are now closed or removed from your credit report after the divorce, it could reduce your available credit and impact your credit utilisation ratio, which is a factor in your credit score.
It's important to manage your finances carefully during and after a divorce to lower the impact on your credit score.
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