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What Happens To Your Credit When You Get Divorced?

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When spouses divorce, they not only have to figure out the finer details of living their lives separately, but they will also have to figure out their now-individual finances. And, to start, a court will likely divide up responsibilities for shared debts in a divorce decree.

For example, a divorce decree may stipulate that one spouse take over responsibility for paying an auto loan and the other spouse take over the responsibility for paying a mortgage.

While this will help figure out who is responsible for what financially, a divorce decree doesn’t separate the actual financial accounts that were shared with a former spouse — those getting divorced will need to do that themselves. Keep in mind, getting divorced won’t affect your credit directly (marital status doesn’t play a role in determining your credit scores) but there are some indirect effects of divorce that can affect your scores.

If you’re in this situation, here are some things to consider.

Find Out Where Your Personal Credit Currently Stands

As you try to get a hold of everything that’s changing in your life, it’s important to not only know where your credit currently stands but also to monitor it as you start separating your shared accounts (more on that in a minute). You can get copies of your credit reports from the three main credit bureaus — Experian, Equifax and TransUnion — by visiting AnnualCreditReport.com. You’ll want to read over each of these carefully, looking for any errors or problems. Make sure you review each report, as they may each contain different information.

From there, you can keep an eye on your credit by viewing two of your credit scores for free on Credit.com. 

Separate Shared Accounts

If you and your ex have shared accounts, it’s a good idea to consider closing them as part of your separation. To do so, you’ll want to contact your financial institutions and close or separate all shared accounts, whether it’s your joint checking account or a type of loan, like a credit card, auto loan or mortgage.

If you don’t, you and your former spouse will continue to be tied together financially. And if an ex-spouse runs up credit card balances and fails to pay or falls behind on a mortgage that still has your name on it, the black marks will show up on both of your credit reports.

Figure Out Payment Plans

It may be a good idea to refinance joint installment loans, such as auto and home loans, as part of your separation. One spouse may opt to buy out the other’s share. Or, you may agree to sell the car or home, pay off the loan and split any remaining cash. It may take some time to refinance a home loan or to sell a house, so in the meantime it’s a good idea to set up an online account for the home loan that you both can access if you are both responsible for paying on it. However, even if you aren’t, it’s a good idea to both have access. It’s likely better to step in and pay a mortgage for a couple of months, if a former spouse is unable to pay, than to have to deal with the damage to your credit.

Focus on Your Personal Credit

Once you separate your credit from your former spouse’s, it’s important to build a credit history in your own name. Using a solo credit card account to pay for some routine monthly expenses and paying the bill in full each month is a good way to get started. Once you’ve closed and/or separated all joint accounts, you may decide to get a credit card re-issued to you from the same financial institutions you were using before, just in your name only.
This article has been updated. It was originally published January 23, 2014.


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  • Deee

    what happens if a spouse dies ,and owes debt that is not in your name its only in ones name ?

    • http://www.credit.com/ Credit.com Credit Experts

      Deee —
      We are not lawyers, but this is our understanding: It may be paid out of that person’s estate, if there is one. (In that case, the surviving spouse is not generally legally responsible for the bill.) Or, if the couple lives in a community property state, the debt generally belongs to the surviving spouse.

      • https://facebook.com/freehelpforstevesrealtors Steve Harkness

        Washington State is a community property state and that is what I have seen happen. The husband passed away leaving no life insurance to his foreign born wife. She was saddled with all the debts, had lost her means of support. It was very sad thing to see.


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