6 steps to take to protect your credit in divorce or breakup

debt in divorce

Thanks to Capital One for sponsoring this post.

Divorce or a breakup with a live-in partner can be one of the most vulnerable times in life — including when it comes to your credit score and online identity.

Unfortunately, it is often too late to learn that significant funds are missing from your shared account, or what you thought was your car, isn’t actually in your name — all during a time when your credit score and personal finances are more important than ever.

Further, the fact that you are more likely to make financial transactions during this transition — opening a new savings account and a checking account, buying and selling a car or home, or seeking out student and personal loans — means strangers have higher-than-usual access to your personal data.

When I divorced more than eight years ago, my now-ex-husband and I were entirely financially entangled. We shared a savings and checking account, as well as a credit card. He loved to spend and didn’t seem to understand that we would not be supporting two households on the same amount of income.

I also knew that I would now need to buy a car (we live in New York City and shared a station wagon) and I wanted to buy him out of our shared co-op — all of which meant that I needed my credit score to remain excellent.

I couldn’t rely on him to take care of this part of my life, so I made sure I did what was needed to secure my kids and my’ future, which mean a sharp focus on my credit score and history.

The good news is that thanks to some simple steps, I successfully bought him out of our home, and a couple years later, bought a new car, launched a successful business, and today continue to enjoy the benefits of a high credit score.

Here are six steps you can take today to help secure your identity in the face of a divorce or breakup:

Know your credit score and numbers

If you don’t already know it, get clear about your credit score and report. Pull your credit history right away.

Understand which accounts are in your name, which are in your partner’s, and how much is owed. You may discover accounts you did not know about.

You may also get a wake-up call about how involved you actually were (or were not) in the family finances.

Commit to making credit management a priority. Consider investing in an online identity monitoring service.

Open new accounts in your name

Open a new savings account and a checking account in your name only.

If you don’t already have a checking account and credit card that are in your name, and your name only, go to your local bank branch and do that today.

Deposit paychecks into these accounts, and start charging on the new card — as well as paying it monthly before the due date (set up auto payments to make this easy).

This establishes credit if you have none, or can quickly improve your score if it is low.

Get rid of shared accounts

Closeout joint accounts. Also, remove your ex from any of your accounts for which he or she is an authorized user, and ask your name be removed from their accounts if you are an authorized user there.

If both your names are on a checking or savings account, then both of you can take out all the money.

Likewise, if you share a credit card, line of credit (like a home equity loan) or personal loan, your partner can max out the debt without your approval, and you could be legally responsible for it.

Also, if your partner promises to make timely payments, but does not, that could affect your credit score as well.

Stay diligent about your finances

Stay on top of all finances like a hawk. Get all statements sent directly to you each month.

Regardless of what your soon-to-be ex-promises, or what a separation or divorce decree requires, take responsibility for paying bills on time each month. Your credit score will be affected if they are not, and that will cost you.

Contact your lenders

For accounts on which both you and your partners’ name appear, officially notify lenders, banks and credit cards of your divorce.

Send a certified letter with a copy of the divorce decree, ask that they provide a current account statement and tell them that you do not intend to be held liable for any debt accumulated after the date of the letter.

Request the account be put on inactive status so no new additional charges may be added, and that once the balance is paid in full, the account is to be closed completely.

Manage your breakup emotions

Be practical. During a big breakup or divorce, you’re likely be experiencing a lot of emotions.

It can be easy to focus on your anger or sadness for your ex. Those are real feelings and you should work through them.

But remember that pillow talk is not enforceable in court, and trying to get him to uphold responsibilities he does not want to embrace is wasted energy.

Focus on what you can control, and keep your eyes on building a career, finances, and life of your own — the most beautiful opportunity divorce affords you.

I know first-hand that going through a divorce can make you feel vulnerable in nearly every facet of your life, but financial vulnerability can be managed with some diligence.

With the right steps in place, you can get through this and secure you and your children's’ financial well-being.

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About Emma Johnson

Emma Johnson is a veteran money journalist, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, U.S. News, Parenting, USA Today and others. Her #1 bestseller, The Kickass Single Mom (Penguin), was named to the New York Post's ‘Must Read” list.Emma regularly comments on issues of modern families, gender equality, divorce, sex and motherhood for outlets like CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine and The Doctors. She was named Parents magazine’s “Best of the Web,” “Top 15 Personal Finance Podcasts” by U.S. News, and a “Most Eligible New Yorker” by New York Observer.A popular speaker, Emma presented at the United Nations Summit for Gender Equality. Read more about Emma here.

1 Comment

  1. ScoreShuttle on October 23, 2018 at 3:26 pm

    Everyone can relate to the hardship of a divorce or breakup, but when your credit is involved, it can be extremely difficult and overwhelming. This information is perfect for someone in this tight situation, especially when it comes to understanding your credit prior to a split. Thank you for these valuable steps!

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