Divorce is a distracting process. You have your own life to keep up. If you have children, you are spending extra time helping them deal with your divorce. If you are in a litigated divorce, you are not in control of your time. If you are in a collaborative divorce, you still have to get to meetings and gather information. If you have friends, you are spending additional time grousing with them about your divorce, your attorney, your kids and your soon-to-be-ex. With these distractions, any normal person can miss a payment.
Recently, Wall Street Journal Getting Going columnist, Karen Blumenthal, wrote an informative column, How to Wreck Your Credit Score. Karen notes, “The severe consequences underscore that you shouldn’t shrug off even an accidentally missed [mortgage] payment… Being 30 days late on a house payment – even if it is an accident – can knock 100 points off a pristine 780 credit score, moving you from qualifying for the very best interest rates to the edge of subprime territory.”
So, how bad can that be? She explains that if you have a 620 score, you would pay almost 12% on a four-year $25,000 care loan. If you have a 780 score, you would pay 5% on that same loan. The difference is almost $4,000 over the four-year loan. I’m sure you can think of something better to do with $4,000.
Where would you rather spend $4,000?