Can Divorce Ruin My Credit?
Most credits can be extended to immediate family members. When a credit is extended to a family member, the principal member assumes the primary responsibility of paying the amount due on the credit card or credit obligations. Most often, credit extensions are extended to spouses.
In the United States when there is divorce, most couples undergoing divorce or have been divorced for some time, get surprised that they are billed for things that they have no knowledge of having bought. Situational examples are:
1. Your ex-wife has stolen your identity. Your ex-wife used your name and SS number to get a credit without your knowledge.
2. Your ex-wife or ex husband is an extended credit card holder. You being the co-owner are still liable for charges made on the credit card that your ex-wife has been using. Joint accounts make you responsible for any debts entered by the two of you.
When these things happen, you would certainly be at a point where you want to know what your credit standing is. You need to be aware that punctuality in paying debts and the extent of your debts are factors in evaluating your credit score. Your financial history of meeting your debts is reported by credit reporting companies to credit scoring companies. Results of these are provided to lending institutions or companies who will decide on whether to grant you a loan or not.
Divorce can ruin your credit if you do not act on your accounts ahead of time. Post divorce credit problems would be avoided if you immediately close your joint accounts with your spouse. You may be unaware of this, but lenders do not honor divorce decrees. Creditors can still collect payment from the other spouse. The problem in this case is when the other spouse refuses to pay or fail to pay. This will affect the credit score if debt is unpaid on time.
Therefore, it is important that if you are planning to divorce your partner, it is wise to get your name off the accounts. Do not wait for the time of divorce to act on this. You are not sure how much harm your ex can do to your credit score and damage your credit worthiness. You need to take charge of this issue right away.
Shut down credit accounts that are in both of your names. Open a similar account in just your name. When there is a situation like the house make sure to get agreements ahead of time as to who is going to take of the house payments while you are having your name removed from the loan (special ways to do this).
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