What will happen to my credit rating or ability to get a loan?

Although a particular marriage may be coming to an end as a result of divorce, unfortunately, the same cannot be said for any and all debts and/or credit obligations accumulated during that marriage. While there are many uncertainties connected with the entire divorce process, one element can be counted on to remain constant - the monthly bills. Therefore, from the moment the decision to separate is made, it is very important to understand the effects this will have on your debts and credit rating.

A person’s credit history is very important as it is a major means by which a particular creditor can judge whether or not you are a good risk for a loan or credit line. Your history reflects what you have done with previous loans/credit lines and your willingness to repay borrowed monies. This factor and your current income are what determine what is known as your "credit worthiness". It is your credit worthiness that will ultimately decide whether or not you will be granted the loan or line of credit you apply for.

It some cases, it might be necessary to keep an open a joint line of credit to pay for such things as child expenses or property maintenance during the separation. In this instance, though, it is strongly suggested that it is put in writing exactly what the account is to be used for and what amount each spouse is expected to contribute to that account. It is even possible to arrange things so that neither spouse can withdraw/spend any of the monies in that account without the other’s written consent (for example, a check that requires two signatures to be valid). For the most part, however, it is recommended that no new joint accounts be opened.

During the separation period, in anticipation of the final divorce, it is also a good idea to obtain a copy of your individual credit report. In some cases, you may be entitled to your report free of charge, otherwise you can expect to pay a minor fee. There are three major credit reporting agencies.

Experian, P.O. Box 2104, Allen Texas 75013-2104
Trans Union, P.O. Box 390, Springfield, Pennsylvania 19064-0390
Equifax, P.O. Box 105873, Atlanta Georgia 30348

Your individual credit report will be able to give you an accurate list of all your current outstanding debts as well as previous credit history. Should you find that errors have been made, there are avenues available through which your credit standing can be corrected. This information will also be made available via the credit bureau.