Protect Your Credit Through a Divorce
Simple steps to keep your credit safe while you rebuild.
The quick version
If your name is on a joint debt, you are 100% responsible for it, no matter what your separation agreement says.
Close or separate joint debts and bank accounts as soon as you can.
Change your passwords and PINs.
Open credit in your own name if you do not have any.
Check your credit report a few months after the changes.
Going through a separation? Book a confidential call and we will make a plan to protect your credit and your next home.
Why this matters
Separation comes with a lot to handle in a short time. Dividing assets usually gets the attention, while credit gets pushed aside to deal with later. But late payments can stay on your credit report for about six years, so a few missed payments now can follow you into your next mortgage.
1. Deal with joint debt
If your name is on a debt, the lender can hold you responsible for the full amount, even if your ex agreed to pay it. Your separation agreement is between the two of you. It does not bind the lender.
List every joint account: credit cards, lines of credit, loans and the mortgage
Close or split them where you can, and move each balance into the name of the person responsible for it
Remove authorized users from your cards, and ask to be removed from theirs
Check your credit report 3 to 6 months later to confirm everything is closed and reporting correctly. Errors are common.
2. Separate your banking
Open a bank account in your name only and have your pay deposited there
Move your automatic payments for the bills you will be responsible for
Close joint bank accounts once you have agreed on how to divide them
Change your online banking passwords and card PINs to something brand new
Even in the friendliest separations, money stress can lead people to make decisions they would not otherwise make. Protecting your accounts protects you both.
3. Build credit in your own name
If you have only ever been a secondary card holder, or all your credit was joint, you may not have much of a credit history on your own. That can make your next mortgage harder.
Apply for a credit card in your name alone. The limit does not matter at first.
Use it for small purchases and pay it in full every month
Over time, add a second account so you have two trade lines, which is what most lenders like to see
Thinking about your next home?
Whether you are keeping the family home or starting fresh somewhere new, I can help you understand where you stand and what to do next. All conversations are completely confidential. Book a call whenever you are ready.
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