Divorce is never easy, whatever the reason it's a major change in your life. Even the most amicable divorce can get messy as some point.   It's important to remember to protect your credit you've worked to hard to establish.

During a separation or divorce a breakdown of communication is common.  A promise once made to make payments on bills can go unfulfilled.  A spiteful spouse can max out credit cards.  It is important to know what bills are outstanding and what is in both names.

If you are proactive and know what is on your credit, you wont have to start over and rebuild your credit. 

One of the first things to do when facing a separation or divorce is to get a copy of your credit report.  The 3 major credit bureaus are Equifax, Experian and TransUnion.  (You may obtain a free credit report once a year from AnnualCreditReport.com)

Once you know what is on your credit report you can create a list of all the accounts that are currently open.  You will want to make note of the name of the creditor, the account number, type of account, status of the account, monthly payment and how the account is held.  (joint/individual, authorized user)

Two types of accounts usually held are secured (mortgage or car loan) and unsecured (credit cards).

The secured accounts are tied to assets such as your home or cars.  You can either sell them or refinance them.  If you choose to refinance either the car or the home, you want to make sure you have a written agreement as to what your spouse is expecting to get from this.  In other words, if you home has equity of $50,000, your spouse may be looking for half of that amount of equity to have their name removed from the home.  If you chose to keep your name on the secured debt and not the one making the payments an unfulfilled promise to make the payment can leave you with damaged credit. Also, when you stay on the loan, make sure your name is also kept on the title.  If you name is removed from title you will no longer have ownership in the property, but will still be responsible for the payments. 

When looking to refinance your home, it is important to speak with a mortgage professional to review your current home loan, the equity available and any options available.

With unsecured debt there are several different methods you can take.  If you a authorized user or signer on the account, call and have your name removed.  If your spouse is a authorized user/signer on the account call and remove their name from the account.  Even request a new card with a new number be sent to you.  If you are a joint card holder on any accounts call and close them.  If you have a balance on the accounts, you may have to ask that the account be frozen.  This will prevent future charges or cash advance from being made on the accounts. 

You can choose to open an account in just your name and have the balance transferred to your new account to ensure that it will get paid.

Continuing to make payments on any accounts that carry a balance is very important to preserve your credit.  One 30 day late payment can drop your score dramatically.  It is also important to know that a divorce decree will not matter to a creditor, secured or unsecured.  If you are on the loan or credit card you will be just as responsible for the payment.  If you divorce decree states that your spouse was responsible for the Discover bill and he missed several payments your credit will reflect those late payments, unless your name was removed. 

Make a plan, know what you have in your name, know what bill is due when.  When you have the information it is easier to protect yourself. 

There is life after divorce and protecting your credit will make it just one less thing to worry about later.

Talk to a mortgage professionalto help you refinance your home or obtain a new home after seperation/divorce. 

Kim Murphy - providing home loans for Illinois including DuPage, Kane, Lake and Cook Counties