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Sometimes divorces happen. It may seem weird, but divorce may affect your credit score. Puzzled by this statement you are asking me - how? And then - disappointed - how to avoid this?

Let me start with the first question. My sister has recently divorced and this somehow affected her credit score as well as the whole credit history. What is the most pathetic, now she is unable to qualify even for a small loan. How could that happen? How can we secure ourselves against such situations? Although it may seem that credit score is not something to think about right after the divorce, it is exactly something you should not forget about.

So, it is a fact now that former spouses have to struggle not only for the inward peace but for the financial stability as well. When you go into married life it is a wise thing to think how you will manage your credit card accounts.

A correct approach will protect you from the unnecessary troubles. The thing is that when people are just getting married, divorce seems as something that will never happen. It may all be on the contrary. And when you will take into consideration that divorce procedure affects both sides' credit history, moreover, you both will have to pay your obligations... it will become clear - something needs to be undertaken to avoid unfavorable situations.

It is all about whether your spouse and you have a joint or separate credit account. Why? It affects your whole financial standing after the divorce. It doesn't matter services of which credit card company you use.

The main factor is the human factor. Who knows, you spouse (hopefully not) may turn out to be financially irresponsible and personally not decent person. Nobody is ensured against this. It is life. Often we can't predict other people's behaviors but we can decide for ourselves - how to manage your credit card.

In case you have a joint account you are both responsible for paying all the bills and repaying credit card debt if such is present. A good credit history, as well as high incomes might make you enjoy low interest rates and great points.

But things may go different. One of the spouses may start using the card destructively. Despite the fact that another side is perfectly responsible for his/her part of monthly payments, he/she will most likely be obliged to pay off the due bills! Late and missed payment of your spouse inevitably appears on your own credit report.

It may take you much effort and time to build up a good credit score. So, think twice. Well, not "marry or not to marry", but "to have a separate or joint account". It should not be a romantic decision but a decision of two grown up wise people.

I personally strongly recommend all the people going into the marriage to have separate accounts rather than joint accounts. This way you will always be responsible only for your own debts.

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Comments

Kevin, 07:35 AM, September 25, 2007
It reminds me of sighing a marriage contract before wedding. It seems as if all people are busy with managing their budget correctly but not thinking about happy life without divorce.

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