The Centers for Disease Control and Prevention reported the marriage rate as 6.8 out of 1,000 of the population in 2009, and the divorce rate in the same year as 2.4 for every 1,000 people. Any credit held jointly reflects on both partners, and poor credit habits and the failure to make payments means difficulties for both people in obtaining future credit.
Creditworthiness
Poor credit affects the consumer interest rates paid on loans. It also increases the premium prices you pay for car and home insurance policies as well as the cost of taking out a student loan and mortgages. Credit reporting agencies track credit through lender and credit card company reports, and determine a credit rating and score for individual borrowers. Married couples using joint credit receive a score based on the credit of the individual partners, but poor credit habits impact both partners equally when credit is shared.
Married Couples
Credit companies extend credit accounts both jointly and to married individuals as separate accounts. Couples holding joint accounts hold joint responsibilities in borrowing and making the payments on the balance, and credit reporting agencies record married couples holding accounts only as personal and independent borrowers. According to the Federal Trade Commission, couples with separate credit accounts allowing the other spouse rights as an "authorized" user are equally responsible for their spouse's debt, regardless of the original borrower name on the account.
Divorce and Credit
Legal divorce judgments recognize separate credit accounts as personal property, not as joint property, in states without community property rights. Credit reporting companies in states recognizing community property rights, including Texas, California, Idaho, Nevada and Arizona, hold both spouses responsible for debt when the account allows both people to sign for credit. When one spouse used the credit exclusively for personal purchases outside the joint marriage funds, that spouse holds the responsibility for any debt.
Removing Spousal Credit Problems
Even when a divorce degree divides joint debt, credit held jointly still reflects on the credit reports for both people. Courts require spouses to provide proof of any exclusive credit status during bankruptcy proceedings; credit agencies mandate the same proof to remove credit dings due to spousal spending or when a spouse fails to make payments on a debt held as personal debt during the marriage.
Proactive Actions
Divorcing couples must take steps to separate individual credit from joint accounts by contacting each credit company and lender to determine how the credit is held. Order credit reports to confirm joint, individual and authorized-user accounts. Telephone the lenders listed on your credit report, and follow up with a written request, to remove your soon-to-be ex-spouse from any account not intended as a joint account. Contact the credit reporting agencies directly to identify any lenders unwilling to remove the spouse from accounts.
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