Take Ownership
Going through a divorce can be very difficult for all parties involved. Not only can the entire process be quite stressful, but it is likely that there are many other things on your mind during this time that you may easily forget about protecting your credit. Even if the terms of your divorce are quite amicable, the future credit activity of your spouse can negatively affect yours if you do not take some precautions to separate your credit lines apart prior to finalizing your divorce.
Only you are able to take ownership of your finances and your credit is a large part of this. The first step in the process is to review all of your credit reports. Upon pulling your credit reports you should be looking to identify the jointly-held accounts where both you and your spouse shared. Once you review, you should close any credit cards that were jointly shared. While closing a credit card typically negatively affects your credit score, it is imperative that all joint cards are closed. Make sure the joint card’s balance is paid in full and then open a new card in your name only. This new card will now be your new means of credit and it will solely be yours and yours alone.
Take Care Of Yourself
Once you’re divorced, you legally do not have any credit responsibility to your spouse. Of course the terms of every person’s divorce all vary so while it is possible that you may need to financially still support your spouse, you do not need to share a line of credit. It is recommended that you remove all credit card authorizations from appearing on your credit cards. Even in the best terms of a divorce, it is dangerous allowing an ex-husband or wife to still have access to a credit card. Even on an emergency card, access should only be for you. To this point you should also require your spouse to do the same. The reasoning for this is not necessarily to prevent you from using their card, but instead it is a safety net used to protect you. Should your spouse fail to meet credit card payments, you will not be held fiscally responsible if you are not on their card.
Check Up & Resist Temptation
After a divorce is finalized, the last thing that you might want to do is check up on your spouse, but considering how much stress it can cause to your credit line, it is necessary to do a check-up. If your spouse agreed to take on a mortgage, auto loan or other debt that could not be refinanced into the name of only one person then you need to request the lender to send you monthly statements. This is a way for you to establish a way of checks and balances to ensure that payments are being made on time. If you are concerned about your spouse using your credit then credit monitoring services are very helpful to give you updates when changes are being made to your credit report.
Lastly, it’s also important to resist any temptation to rack up some big-ticket items and serious debt. It may be unavoidable to build up some debt after a divorce thanks to legal fees and other expenses from moving into a new place, etc. That said, there are definitely some ways in which you can cut expenses and therefore reduce debt. As long as you take all the necessary precautions, your financial future following your divorce will be a bright one!