Ending a marriage is painful enough on its own, but when one of the results of your divorce is a trashed credit report and score, it can hurt even more. Even just one unpaid joint credit card can knock points off your credit score. You can take steps, though, to protect your credit rating both during and after the divorce, ensuring that you can make a financial fresh start after your marriage ends.
Time
Fixing poor credit is often a matter of time. Regardless of the reason for your credit woes -- divorce, illness, unemployment, etc. -- the only true way to fix your credit is to pay what you owe, maintain a solid payment history on the accounts that are in good standing and wait for the legitimate negative information to be removed from the report. Most information will appear on your credit report for at least seven years. After your divorce, regularly monitor your credit report and address any errors immediately. Continue to use credit responsibly, by paying your bills on time, keeping your balances low and limiting the number of new accounts you open. In time, your credit score will improve.
Joint or Separate Accounts
How a divorce affects your credit depends in large part on whether your accounts are individual or joint. A joint account takes both partners' information into consideration and both are equally responsible for repaying the debt. Individual accounts are those in which the lender considered only one person's income, assets and credit history when making the offer for credit. If you live in a community property state -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin -- then both spouses may be responsible for all debts incurred during the marriage, regardless of whether the account was individual or joint. You are responsible for any account with your name on it, so continue to make payments until your name is officially removed from the account to keep your credit intact.
Credit Report
When you and your spouse decide to separate, take steps to protect your credit, as you could end up responsible for debts your spouse runs up during the divorce process. Remove your name as an authorized user on any of your spouse's accounts, and close or convert any joint accounts. As soon as your divorce is final, request a copy of your credit report from all three credit bureaus. Carefully check your report for errors and discrepancies, and notify the bureau if your report lists any accounts for which you're no longer responsible. Continue to monitor your report regularly and immediately address any incorrect information that appears.
Divorce Decrees
Many times, a divorce decree will state that one spouse is responsible for assuming certain debts, such as charges on a joint account or a card in your name that she was authorized to use. However, even if the divorce decree indicates your ex-spouse agrees to pay, you are still legally responsible for the debt, so if she does not pay the bill, your credit suffers. When you receive your divorce decree, forward a copy to the creditor, explain the situation, and ask to have the contract or agreement amended to legally shift responsibility for repayment to your ex-spouse. Not all creditors are willing to change the agreements; if your creditor will not, carefully monitor the account to ensure the debt is being paid. If your ex is falling behind, you'll need to pay the bill to keep your credit intact and work with your ex-spouse to get the money back.
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