When spouses divorce, the court divides 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.
But a divorce decree doesn’t separate the actual financial accounts that you share with a former spouse. You need to do that yourself.
Separate Shared Accounts
Contact your financial institutions and close or separate all shared accounts, including credit cards, home loans and mortgages.
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.
So close out all joint credit cards and ask each financial institution to re-issue you a card in your name only. Refinance joint installment loans such as auto and home loans. 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.
You’re both responsible for the payment so you might as well both have access to the account. 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.
Build Credit In Your Own Name
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.
Use Credit.com’s free Credit Report Card for a free credit score and check back each month to track your progress.