Protecting Your Credit in a Divorce

The current statistics in America show that 60% of all marriages end in divorce during the first 10 years, and 80% will end in divorce during the first 20 years. If there is the possibility of a divorce approaching, preparing before anything is finalized is the best way to avoid credit damage. If the divorce is already finalized, there are still many ways to protect and build your credit. Listed below are tips that will help guide you to a better credit situation and minimize excessive financial stress.

• Get a copy of your credit report. Have any personal information changed (e.g., name and address changes.) Find all joint accounts, and make sure that each one is taken care of.
• Consider getting a credit monitoring service, so you will be aware of any activity on your credit report. This is especially helpful if your spouse is responsible for joint account payments and you currently have no contact with them. You will be notified of any late payments, which you can remedy before the account becomes seriously delinquent.
• A divorce decree has no legal standing to lenders. If you have a joint account and the divorce decree states that your spouse is responsible for repayment but you are never removed from the account, you are still liable. If the account falls delinquent your credit will be affected and the lender will pursue you for payment.
• Open your own bank account, if you don't already have one. Make sure the account has overdraft protection.
• If you have joint accounts, contact the lenders immediately to stop any new activity.
• With joint accounts, if you decide to take over payment responsibilities, remove your spouse from the account. If the account will be the responsibility of your spouse, remove your name from the account. Until your name is removed, make sure your spouse pays the bills on time, because any delinquent activity will be reported on your credit report.
• Keep a good mix of credit in your name. Having a combination of revolving and installment lines of credit open in your name will help your credit score.
• If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, you are subject to community-property laws. This means that any assets or debts incurred during the marriage are the responsibility of both partners equally. Ultimately, you may be responsible for your spouse's debts even if you are not on the accounts.