How To Protect Your Credit in Divorce

Divorce is difficult and complex on a variety of levels, but the best way to make it through is to focus on the future, and that focus should include careful attention to credit. Credit is of particular importance, as it is through credit that many are able to buy cars, houses and to start businesses, all of which are important to quality of life after divorce. There are steps that can be taken to protect credit status during and after divorce. It is rare that a divorce comes suddenly, without warning.

More often, we see the warning signs, but choose to ignore them. This is a mistake in many ways, not the least of which is financial. Divorce or not, each person should be completely aware of all of the financial details of his or her marriage. This should be considered the first, essential step to protecting credit in case of divorce.

If divorce is threatening or is defiantly on the horizon, it is a good idea to start a separate bank account, one that is not held jointly.

This should be followed up by getting credit reports from each of the three major credit reporting agencies and then applying for a credit card, in one name only, with no other authorized users.

If it is not possible to get an unsecured one, go for the secured credit card. The idea is to start to create a credit and financial history independent of the marriage, so take care to make it a good one – avoid late payments and other credit mistakes. In most marriages, there is some joint credit debt. Both partners are liable for these debts, and the credit history of both will be affected one way or the other, often even if the divorce settlement assigns debts to one partner or the other. The best bet is to try to make the affect a positive one by seeing to it that joint credit debt is paid. don’t let the emotions associated with the divorce stand in the way of future credit health. Try hard to negotiate joint credit debt repayment with the soon to be ex-spouse.

One very effective means of quickly resolving joint credit debt when divorce happens is for each partner to take out a separate debt consolidation loan and immediately pay off their share of the joint credit debt. Then, each partner is responsible for his or her own loan, and there is no need to worry about whether or not the joint credit debts are paid.

Other steps to be taken include closing or freezing all credit accounts. Credit accounts still owed should be put into the name of the partner who will be responsible for paying, credit lenders should all be notified of the divorce and the credit changes, including authorized use changes for credit cards and accounts, in writing, and should be notified that partners will henceforth only be held accountable for debts in their name.

With thought and planning, it is possible to make it through a divorce without excessively damaging credit. The steps taken today will help to protect credit status, making it easier to create a satisfying and pleasurable life after divorce.

Tip: You should pull your credit report from all three credit bureaus to see what accounts are listed in your name. Even joint accounts that may be assigned to your spouse for repayment by a divorce judge will still affect your credit. If your spouse defaults on the payments (despite a court order), your credit will still be affected if the account is joint, and showing on your credit report.


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