5 Steps to Saving Your Credit from Your Ex
How your credit can be affected by your ex-spouse even after divorce and what you can do to protect yourself
Saving your credit can be hard, especially if your ex has stopped making credit card payments.
I recently worked with Sandra, who split from her spouse several years ago. Her ex-husband agreed to pay off the couple’s $60,000 in credit card debt, and they made the agreement part of their official divorce decree. Sandra thought that was the end of that.
Unfortunately, it wasn’t.
Creditors hounded her because her ex missed payments, and on top of that, all the late payments trashed her credit. She was unable to even qualify for her own credit card since Sandra’s ex was the primary credit card holder and she was only a secondary user on the credit account. Sandra never thought to ask if she would get credit for all the on-time payments she made when the two were married.
Sadly, Sandra’s financial advisor forgot to mention that establishing your own credit – in your own name – is crucial. If your entire credit report is based on joint credit cards and bank accounts, your spouse’s debt can follow you – even in the event of a divorce.
Luckily, Sandra decided that she no longer wanted to work with her ex-husband’s advisor, and she called me. We worked together for years, and she finally established her own bank accounts and credit cards. It was a long process, but well worth it for both Sandra’s financial well-being and overall peace of mind.
Here are a few highlights of how Sandra was able to take control of her financial future.
Tips on Saving Your Credit After Divorce
1. Contact the Creditor
We called the creditor and asked them to make a note in Sandra’s file that she had split with her spouse. Next, we explained that Sandra wanted the account to be handled as agreed upon in her settlement.
2. Follow Up
After our telephone conversation, we followed up with a letter recapping the conversation and our instructions. We asked them to send us written confirmation that they took the actions we requested.
3. Make Sure the Bills Are Getting Paid
This is key. Divorce negotiations can take months to finalize, and all it takes is one late payment to hurt your credit. Sandra began making minimum payments on accounts that were her spouse’s responsibility and spoke with her lawyer about getting compensation.
4. Request Documentation
Once her spouse was making on-time payments, we asked the lender to send the loan statements and payment coupons to Sandra to so that she could see if her ex was falling behind, and perhaps step in before her credit ratings suffered.
5. Close the Account
We also checked into having her ex close the credit card and roll over the balance to a new credit card in his name only. Sadly, this was not possible as his credit history was spotted, and he did not qualify for an unsecured credit card.
If you discover that your ex’s bad financial habits are threatening your own credit, I recommend you take the same steps towards saving your credit.