Divorce - It's not just your spouse...It's your Credit

Divorce can be a nasty process filled with bad emotions, attorneys, and court visits. You are terminating a relationship and dividing up assets and liabilities. Lawyers will take an inventory of assests and debts, put them into columns and divide them up, but in many cases, once the debts have been assigned to one side or the other, they just wash their hands of the situation.

Nobody seems to consider the long term implications of this sloppy division. Sure, everyone knows who's responsible, right? WRONG!

The lenders are not a party to the divorce. Just because the court says Mr. is now responsible for the car loan, or Mrs. is now responsible for the mortgage, that doesn't change the fact that both parties share that item on the credit report. The lender does not sign off on the divorce and your ex-spouse (who now has to maintain their own residence and utilities) may not be able to make all their payments on time.

Why should you care? Because your credit report can and will show negative marks if your ex becomes late or delinquent on an account that was opened with you.

When you divorce, you should:
1. Get a copy of your credit report, a joint report if possible.
2. Close all joint accounts you held with your spouse. Do it in writing and make it irrevokable (meaning the account may not be re-opened without your written permission).
3. Apply for credit on your own.
4. Make sure to refinance the mortgage or if you are not the one keeping the property, make sure your spouse is made to refinance by court order in a reasonable period of time.

These simple steps will help you keep your credit report looking good even if your spouse's credit rating suffers.
Remember, if you don't want to share their life any longer, you shouldn't share their credit report either.