Part 2 – The Divorce Myth
Going through a divorce is never easy or fun. Okay, there’s probably a few people out there who enjoyed ending a bad marriage… who are we to judge? Regardless of whether your split is a joyous or acrimonious one, rest assured your finances are likely to go through a bit of an upheaval. There are several different wild theories out there regarding your credit health and the result of a divorce. For our purposes, however, we’re just going to touch on the three of the biggest myths surrounding divorce and your credit score.
- Separate vs. Shared Credit Scores – Let’s nip this one in the bud right away – there is not, nor has there ever been, a joint credit score for married people. Everyone has his or her own credit history and credit score. But we bought the car and house and boat and RV together?! Right, and those purchases – as well as the payment history – will appear on both of your credit reports. The same goes for any joint accounts. The lone exception is being an ‘Authorized User.’ If your husband or wife simply added you as an authorized user, then you are not responsible for that debt, and it shouldn’t show up on your credit report.
- Divorce has No Impact on Our Credit Scores – This one takes a bit more explaining. The simple act of obtaining a divorce has no direct affect on your credit score. However, if proper steps are not taken, your score could possibly drop because you and your former spouse never fully separated your debts. Basically, it isn’t your legal status of married or divorced that impacts your score, but rather if you are still a joint holder on an account your ex-spouse isn’t paying on time.
- A Divorce Decree is Not Binding – At the close of some marriages, one spouse may agree to pay off debts, or each party negotiates on who gets what and who will pay off this or that. There is a document put into the divorce settlement called a Divorce Decree (it might be called something different depending on your state). This is an agreement between the two parties. It is NOT an agreement between you and your creditors. It carries not change of legal obligation to the debt. For example, if you both co-signed for a car, and your spouse agrees to keep the car and continue making payments, you’re still legally responsible for the debt. The only way to remove yourself from the auto loan is to have your spouse refinance it under their name only.
For information not listed here and for all of your other questions, we encourage you to call us. Our famously knowledgeable Credit Experts will be able help you understand anything you might be fuzzy on. You can call us at (855) 856-0500, or email us at firstname.lastname@example.org.