According to the BBC, divorces and breakups ‘skyrocketed across the UK and around the world’ in 2020. Predictably, the main culprit ascribed to the marital mass layoffs is Covid-19: specifically, the lockdowns enforced to curb the spread of the virus. It’s fair to assume that financial and health complications caused by the virus will have contributed to the rising divorce rate too.
The BBC article says that ‘lawyers, therapists, and academics are starting to get a clearer understanding’ of the reasons for the surge in relationship breakdowns. Like a lemon pressed in a juicer, having your happiness squeezed out of you by being stuffed in a room for months leads to reduced affection levels towards your partner. Add on the threat of covid-related financial ruin, and it all gets a bit much.
Ironically, the virus responsible for physically imprisoning us might be setting thousands of us free from the emotional prisons of our ill-fated relationships.
If you’re recently divorced, or are considering it, you’ll want to know what it means for your finances. As far as your Credit Score is concerned, you don’t need to worry. Getting divorced does not directly affect hurt your Credit Score. This is especially good news if you’re going to apply for a post-divorce mortgage for a new home.
Do I need to update my Credit Report after divorce?
Your marital status does not feature on your Credit Report, so you don’t need to update the Credit Reference Agencies with news of your new status.
While a divorce won’t directly affect your Credit Score, and your marital status isn’t included on your Credit Report, there are still two things you should do post-divorce to ensure your Credit Report accurately reflects your new situation: updating your details on your credit accounts and removing any out-of-date Financial Associations.
Updating your registered name and address on your credit accounts and Electoral Roll listing
If you’ve changed your name and/or address after divorce, you’ll want to make sure that your Credit Report reflects this new information. This is important because, when you apply for credit, the lender will search your name and address – as provided on the application form – with the Credit Reference Agencies in order to obtain your Credit Report. If your credit accounts and Electoral Roll listing are still registered under your previous name and address (and you’ve applied using new information), the lender may struggle to find your full Credit Report.
This can make it harder to get accepted for credit, especially if your positive credit history – which serves as evidence of how well you manage your credit accounts – goes unchecked.
Having all of your credit accounts and Electoral Roll listings registered neatly under the same, consistent name and address will make it easy for any lenders to perform a full credit check on you, with no risk of missing any important information.
To ensure your Credit Report shows your new name and address, you just need to contact your lenders, utility suppliers, mobile phone providers, etc. as well as your local council to request they update your information on their records.
Once they hold your new name and address, they should in turn send the new information through to the Credit Reference Agencies as part of their next monthly update. You can then use checkmyfile to check that any changes requested have actually been done, and to see your Credit Report just as a lender would.
Removing out-of-date Financial Associations
The second thing you’ll want to do to get your Credit Report looking its best after a divorce is to remove any out-of-date Financial Associations: namely, your ex-partner.
We’ve written a guide on Financial Associations previously and have an easy step-by-step walkthrough on the disassociation process for you to follow.
If they’re named as a Financial Association on your Credit Report, their Credit Report can be checked alongside yours whenever you apply for credit. That means any negative information on your associate’s report can hurt your applications. For this reason, it’s best to have any out-of-date associations removed, so you know that your applications are influenced only by accurate, up-to-date information.
checkmyfile makes this dispute process quick and easy. You can let us know that you’d like to remove a Financial Association, and we’ll do the rest. We’ll contact the relevant Credit Reference Agencies on your behalf to raise a dispute to have the old information removed. Providing the agencies are unable to find an active financial link between you, they should erase the entry.
It’s worth noting that a Financial Association can be created with any individual, not just someone you’re married to. This means long-term, non-married partners can also pop up on your Credit Report as a Financial Association – you don’t necessarily have to be married for this to happen. The creation of a Financial Association is dependent on whether you have shared finances (such as joint utility payments or a joint mortgage, for example).
But I got divorced and my Credit Score changed!
Your Credit Score can (and likely will) change for lots of different reasons. It will rarely stay completely still. This is because any new payment information on your Credit Report can drive your Score up or down, depending on whether the information is considered positive (like making a monthly payment in full and on time, or opening a new account) or negative (like missing a monthly payment or defaulting on a credit agreement).
There are specific types of information that affect your Credit Score, but this does not include your marital status. In fact, your marital status doesn’t appear on your Credit Report at all, so not only will it not influence your Credit Score, but lenders won’t be able to see whether you’re married by looking at your Credit Report alone.
Additionally, Financial Associations and any subsequent disassociations to have them removed won’t affect your Credit Score either. That means if you remove an ex-partner from your Credit Report and coincidentally notice that your Score has decreased, it will be a different factor causing the reduction – not the disassociation itself.
It’s possible that a reduction in Score is indirectly related to the divorce. For example, if your ex-spouse contributed to your monthly credit agreement payments, and post-divorce you’ve struggled to keep up, then those missed payments will be negative markers that will lower your Credit Score. In this situation, it is the missed payments reducing your Score, not the divorce itself.
To reiterate the main point: divorce will not directly affect your Credit Score.
Will Divorce Make Getting A Mortgage More Difficult?
As far as your Credit Report is concerned, a divorce will not harm your credit standing. Your creditworthiness is measured by assessing your credit agreements, court information, repayment history, borrowing behaviour, and more. A change in marital status is not included in the assessment of your creditworthiness, which is why it doesn’t influence your Credit Score. As such, any mortgage lender at the credit checking stage won’t be concerned about divorce.
That said, there are many factors that contribute to a successful mortgage application, with your creditworthiness being just one.
Your affordability, for instance, may take a hit if you’re applying for a mortgage with one person’s salary instead of two people’s shared incomes.
You may find you’re eligible for a smaller mortgage if you have a smaller income and deposit. On the other hand, if your ex-spouse has a worse credit history than you do, you may find it easier to be accepted for credit if you successfully remove their Financial Association entry from your Credit Report.
As always, it’s best to speak with an independent mortgage advisor if you’re looking for specific mortgage advice.
How do I check my Credit Report?
There are three Credit Reference Agencies that lenders may use when you apply for credit: Equifax, Experian, and TransUnion. As such, you have a Credit Report at each of these.
checkmyfile makes the process of checking your Credit Report information quick and easy by gathering your data from all three Credit Reference Agencies onto a single, easy-to-use platform.
You can try checkmyfile free for 30 days, then for just £14.99 per month. It’s easy to sign up and easy to cancel, online at any time.