If you foresee a divorce taking place in your imminent future, here are three simple tips to making sure that your credit remains protected.
Your marital status is never a factor in calculating your credit score but it does hold the potential to have detrimental impact on it, for better or for worse. This is not due to the marriage itself, but the potential complications that can arise from its dissolving.
These obstacles are caused by accounts being reported to the names of the individuals who are listed as accountable to them. In other words, this means that anyone who is named as a joint owner, co-signer, or authorized user of an account is listed as having to deal with the account, with their credit score being held as collateral.
If you foresee a divorce taking place in your imminent future, here are three simple tips to making sure that your credit remains protected:
1) Close your joint accounts:
This should be made an immediate priority. By removing your spouse’s authorized user status, you are disabling their ability to run up an insurmountable balance that they won’t be held directly accountable to.
Go through your credit report and recent statements to figure out which accounts are joined, and close them on the phone as well as in writing for extra assurance. It is also essential to understand that any agreement with a lender will take priority over a divorce decree, so it is integral that you deal with any outstanding accounts prior to the divorce.
2) Build your own credit:
When exiting a marriage, it is crucial to know where your individual credit score stands. In the instance that you were an authorized user on your partner’s account, it is likely that you have already built up credit under your name and won’t face many obstacles in applying for a new credit account. Otherwise, it is vital that you open your own accounts and start making payments on time under your own name.
3) If you're going to change your name, do it before applying for a new card:
No, changing your name will not restart your credit history. This is because your credit is accounted for by linking to your SIN that tracks all variations of your name. However, changing your name before applying for a credit card will save you time and stress in the future after you receive the new card.
Putting these steps into effect will reduce the likelihood of harm to your credit and work to sustain and build your credit report to work in your favour.
