There is a lot of talk about protecting finances in a divorce and separating assets. Few people in Wisconsin remember to focus on protecting their credit as well. Note that a divorce may not have a direct impact on credit scores. However, it may have indirect effects, especially when it comes to debt or open accounts couples shared together.
Experian reminds exes that a divorce decree does not liberate them from the joint debts they racked up during the marriage. They may still need to pay these off. Common examples may include the mortgage or credit card bills. Even when a particular spouse becomes responsible for a specific bill, note that the other spouse may still be held legally liable if the debt is also in their name. Because of this, if one ex-spouse pays late, both may be affected.
After a divorce, it is important for each person to establish and build independent credit history. This may be especially difficult yet all the more important for homemakers. Because they did not work, most of the credit accounts may have been in their partner’s names. While this may ensure they are not liable for payments, it also means they may have no credit history and need to start from scratch.
A starting point recommended by personal finance company NerdWallet is to open a checking account. If one spouse gets locked out of the joint account or the other person drains the shared assets, this may cause the other spouse to fall behind on bills. This, in turn, may affect their credit history. Naturally, it is also important for divorcing couples to get their own credit card.
Finally, couples should update information and change passwords. Failure to do this could leave the account open to potentially shady activities from a vindictive ex. Change not just online log-ins, but security questions and pins.