How Does Divorce Affect Credit Score in Canada?

How Does Divorce Affect Credit Score in Canada?

Posted on August 9, 2022

Divorce is a tough time. There’s a lot going on and plenty of emotional and physical upheaval. Aside from the personal toll divorce takes, is there a financial one too? We asked our Delhi auto loans team to outline how divorce impacts credit score and your auto loan if you have one.

How Divorce Impacts Credit Score

The divorce itself should have no impact on your credit score. Your score is your own and isn’t influenced that much by other people.

There may be other elements of the divorce that will impact your credit score though.

Missing payments – There’s a lot going on and unless you have automatic payments set up, missing one would be easy. That’s especially true if your ex-partner used to take care of payments.

Joint expenses – If you have a joint mortgage or joint car loan, you’re going to have to come to some arrangement for payments. As both your names are on it, you’re both responsible for paying it and will both experience the cost of missing payments.

Loss of joint incomes – If your finances were built around joint incomes, having that cut in half may put you into financial difficulty, which could result in you getting into money trouble.

If you’re on good terms with your ex, you should be able to come to some arrangement where your finances are separated, loans and debts or paid off and everyone walks away with their credit score intact.

Divorce and auto loans in Delhi

Auto loans follow the same pattern as other finances. If the loan is in joint names, you’re both liable for payments. You’re also both joint owners of the car.

If this is the case, you’re going to need to come to some arrangement about who gets the car and who pays for it. It would be better for you two to arrange that rather than leave it to lawyers!

If the auto loan is in your name only, it’s your responsibility and not impacted at all by the divorce. As long as you can keep making payments, there is no impact whatsoever.

We would recommend dividing your finances as quickly and as amicably as possible so you both retain control over your own.

This won’t always be possible though so it’s up to you to remain vigilant of what bills are due when and who is paying them.

Depending on how amicable, or not, the divorce is, you may want to alert creditors that things are changing. They may be able to offer some help such as reminders or payment holidays.

Either way, if your name is on the agreement, you’re responsible, partly or otherwise for making payments. Any missed payment will impact your credit score.

If your name is not on the agreement, you’re not responsible for making payments. Any missed payments on those should have zero or very little impact on your credit score.

When you’re ready for a car lease or loan, get in touch with the Delhi auto loan experts at Northway Ford for great deals on auto finance.

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