Does Divorce Affect Your Credit?

Married couples can share a number of things, such as bank accounts, physical property and even credit accounts. A divorce, therefore, can affect the ownership of any of the things owned jointly by the couple. Despite this fact, if your spouse is suppose to pay off a credit account and fails to do so, your credit can be affected adversely.

Joint and Individual Credit

You can have credit either as an individual or jointly with someone, such as a spouse. Qualifying for a credit account for an individual means a lender will look only at your credit history, income and other qualifications for the qualification process. You may need a second person on the account, however, to make a strong enough case to qualify for the credit account. With joint accounts, both parties are responsible for making sure the account is paid in time throughout the life of the loan, otherwise the creditor can take action against both parties.

Authorized Users

Even if you have an individual credit account, such as a credit card, you can have an authorized user added to the account. You still obtain the credit account based solely on your credit, but the authorized user can use the account freely. Only you, and not the authorized user, are responsible for repayment of the account, according to the Federal Trade Commission.

Divorce Decrees

As part of a divorce decree, one party may be assigned one or more joint credit accounts on which he must keep making payments until the accounts are paid in full. Joint accounts will not automatically be put in the name of the spouse who has been assigned responsibility by the divorce decree, according to the Federal Trade Commission, meaning the account will still be attached to both parties after the divorce. If the party assigned the debt by the decree does not make the payments, the creditor can legally go after both parties, including reporting the delinquency on both parties' credit reports.

Changing Accounts

According to both the Federal Trade Commission and credit bureau Experian, you can request that joint credit accounts be modified so that they are under only one person's name. You will need to contact the creditor and let it know of the divorce and to request the change in the account. The creditor may require the single party to reapply for the credit account given the change, especially for home loans. You can also request that the account is closed to avoid any problem,s such as the other party running up high balances on credit cards.