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Divorce, Real Estate, and Credit Scores: Protecting Your Financial Future

Concerned couple sitting on a couch reviewing financial documents and using a calculator, representing the credit and financial stress of divorce.
Divorcing couples often feel overwhelmed by the financial impact on their credit—especially when real estate and shared debt are involved.

Divorce doesn’t just split a marriage—it often splits financial stability. And one of the most overlooked casualties in the process is your credit score. If real estate is involved, the stakes are even higher. From shared mortgages to missed payments and lingering liabilities, your credit can take a serious hit if the process isn’t handled correctly.

As a Certified Divorce Real Estate Expert (CDRE), Certified Divorce Financial Analyst (CDFA®), and licensed broker in both New Hampshire and Maine, I help clients navigate these complex intersections of divorce, real estate, and credit—strategically and without unnecessary damage. Whether you're keeping the house, selling it, or buying out your spouse, this guide will walk you through how to protect your financial future.

Why Credit Health Matters During Divorce

Your credit score influences:

  • Your ability to refinance or qualify for a mortgage

  • Your interest rates and loan terms

  • Your housing options post-divorce

  • Your future ability to buy or rent

  • Access to credit cards, auto loans, and business financing

Credit can be damaged during divorce due to:

  • Missed or late mortgage payments

  • Joint credit cards or lines of credit left unpaid

  • Refinancing delays or failed buyouts

  • Being legally liable for an ex’s financial choices

At McNally Group Realty, I regularly work with clients who had no idea how exposed their credit was—until it was too late. My goal is to make sure that never happens to you.

Understand How Your Mortgage Affects Your Credit

Joint Mortgage = Joint Responsibility

If you and your spouse both signed the mortgage, you are both equally liable—even if:

  • You’ve moved out

  • Your divorce decree says your ex is “responsible”

  • The title has been changed

Your lender does not care about your divorce agreement. They only care whose name is on the loan. If your ex misses a payment or stops paying entirely, your credit will be impacted.

Protecting Your Credit During the Divorce Process

1. Know What’s on Your Credit Report

Start by pulling your credit reports from all three bureaus (Experian, Equifax, and TransUnion). Review:

  • All mortgages and joint loans

  • Credit card balances and payment history

  • Closed or open joint accounts

If you don’t know what’s affecting your score, you can’t protect it. I recommend reviewing this with a financial professional—especially if you're managing luxury property or have complex debt.

2. Freeze or Close Joint Credit Accounts

Joint credit accounts are shared liabilities. If your spouse racks up debt or misses payments, you suffer too.

Steps to take:

  • Freeze or close joint cards

  • Remove authorized users

  • Request account division in your divorce decree

  • Monitor ongoing balances and payment activity

As a CDFA®, I help clients identify all joint liabilities and coordinate with divorce attorneys to ensure credit protection is baked into the settlement.

3. Plan Ahead for Refinancing

If one spouse plans to keep the home, they’ll likely need to refinance. Refinancing requires:

  • Stable income

  • Acceptable debt-to-income ratio

  • A solid credit score

If credit is damaged during the divorce, refinancing may be delayed—or denied. That can trap both parties on the mortgage longer than intended.

4. Document Every Mortgage Payment

If you are staying on a joint mortgage temporarily, be sure to:

  • Keep written documentation of who paid what

  • Monitor the loan account regularly

  • Notify your attorney of any missed or late payments

  • Plan a defined timeline for refinance or sale

Protecting your credit score isn’t just about managing money—it’s about documenting responsibility and building a strong paper trail.

Selling the Home? Here’s What You Need to Know

Selling the home often eliminates shared debt and creates a clean break. However, to avoid damaging your credit during the sale:

  • Stay current on the mortgage until closing

  • Coordinate with a divorce-trained real estate expert who understands the urgency

  • Define who pays for pre-sale expenses and missed payments in your agreement

  • Avoid lingering post-sale liens or unresolved debts

At McNally Group Realty, I act as a neutral CDRE for divorcing couples, helping preserve equity, minimize conflict, and avoid delays that can impact credit or court outcomes.

The Hidden Credit Risks in High-Net-Worth Divorces

For high-net-worth individuals and couples, the risks to credit and reputation are even greater. Missed jumbo mortgage payments, defaulted second home loans, or co-signed investment property loans can result in:

  • Credit score drops

  • Legal judgments

  • Difficulty financing new investments

  • Lost lending relationships

I work with professionals, executives, and business owners to preserve their credit integrity through smart strategy, financial collaboration, and real estate execution that aligns with their overall financial goals.

Steps to Rebuild Your Credit After Divorce

Even if your credit took a hit, it’s not permanent. To rebuild:

  • Keep mortgage and rent payments current

  • Open an individual credit account and use it responsibly

  • Pay off joint debt according to your agreement

  • Monitor your credit monthly

  • Work with a financial advisor or coach

I regularly refer clients to vetted credit-building and financial coaching partners for ongoing support post-divorce.

Key Takeaways

  • Divorce can seriously damage your credit if mortgage and joint debts aren’t handled properly

  • Lenders don’t recognize divorce decrees—only refinancing or full payoff removes liability

  • Your credit health impacts your ability to refinance, purchase, or rent post-divorce

  • Selling the home is often the cleanest financial solution if handled correctly

  • A CDRE and CDFA® can help you protect your score while navigating real estate transitions

Don’t let your credit become collateral damage in your divorce. With strategic planning and expert support, you can protect your financial future and make confident decisions about your home, your debt, and your next chapter.

Lisa McNally

Certified Divorce Coach | Certified Divorce Mediator

Certified Divorce Financial Analyst (CDFA®) | Certified Divorce Real Estate Expert (CDRE)

Licensed Real Estate Broker (NH & ME)

Founder, Optimal Divorce Solutions

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© 2025 by Lisa McNally, Certified Divorce Mediator, Coach, Financial Analyst & Real Estate Expert.
Lisa McNally provides professional mediation, coaching, financial analysis, client preparation, and real estate services within her licensed and certified areas of expertise. She is not an attorney, financial advisor, tax advisor, or therapist. For matters beyond the scope of these services, please consult a licensed professional in those areas.

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