Managing Your Money

Divorce and credit

If you are newly divorced or separated it is important to protect your credit and maintain a good credit score.

A divorce does not relieve you of debt obligations that you incurred during marriage. You are still responsible for credit card debt, car loans, mortgages or other debt if your name is on the loan. A divorce decree may obligate your ex-spouse to make the payments, but if your name is on the loan then you are still responsible for those payments. Any late payments will show up on your credit report.

Start by getting a free credit report to see where your credit stands. It is a good idea to request a credit report at least annually and monitor the payments of loans in your name. Make sure all loan payments are made on time – even if you are not supposed to be making the payment, you don’t want to jeopardize your credit rating by allowing any to be late.

Close any joint bank accounts at the time you separate. While you are separated you and your spouse should decide who will be responsible for each bill payment.

After the divorce establish your own credit independently. If you did not have any loans or credit cards in your own name before you were divorced you should build up your own credit history now. Start with a credit card that has a small limit, and charge only a small amount that you are comfortable paying off monthly. That will help increase your credit score. Your behavior during the most recent 18-24 months is very important in determining whether you are a good credit risk. Remember to always make your payments on time and to keep your debt to a manageable level.

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