credit score joint account

Divorce and credit will be charged?

Susie and Bill recently divorced. Their divorce said Bill would pay the balance of his three credit cards joint accounts. A few months later, after the bill does not pay these bills, the three creditors contact Susie payment. She referred to Case divorce, insisting he was not responsible for the accounts. Rightly pointed out that creditors are not parties to the decree and that Susan was legally responsible for paying bills of torque in the joints. Susie later discovered that the late payments appeared on her credit report.

If you have recently suffered a divorce – or are contemplating one – you may want to look at issues related to credit. Understand the different types of credit accounts opened during marriage can help illuminate the potential benefits – and pitfalls – of each.

There are two types of credit accounts: individual and joint. You can enable authorized persons to use the account with anyone. When you apply for credit – whether a credit card or a mortgage – you will be prompted to select one type.

individual or joint account

Personal Account: Your income, assets and credit history are considered by the creditor. If you are married or single, you alone are responsible for paying debt. The account will appear on your credit history, and can appear on the credit report of any "authorized" user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin), you and your spouse may be responsible for debts incurred during marriage, and debts of one spouse may appear on the credit report of another.

Advantages / Disadvantages: If not employed outside home, work part time or who have low-paying jobs can be difficult to demonstrate a strong financial picture without the income of spouse. But if you open an account in your name and are responsible, no one can hurt your credit history.

Joint Account: Your income, financial assets and credit history – and your spouse's – are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible to ensure that debts are paid. A creditor who has the credit history of a joint account to credit bureaus must report both names (if the account was opened after June 1, 1977).

Advantages / Disadvantages: An application combining the financial resources, two people may present a strong case for a creditor is the granting of a loan or credit card. But because two people called for the credit, each is responsible for the debt. This is true even if a divorce decree assigns the debt obligations to each spouse separately. Former spouses who run the bills and not pay them can hurt the story of his ex-partner credit in the accounts of joint ownership.

Account "user"

If you open an individual account, you can authorize another person to use. If you designate your spouse as an authorized user, a creditor tells the story of credit at a credit bureau must report the name of his spouse and name (if the account was opened after June 1, 1977). The creditor also may report the credit history of another user name allowed.

Advantages / Disadvantages: User accounts often are opened for convenience. They benefit people who may not receive credit on your own, such as students or housewives home. While these people may use the account, – not – are contractually liable to pay the debt.

If you divorce

If you are considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it is important to make payments scheduled for your credit history will suffer. While there is an outstanding balance on a joint account, you and your spouse are responsible.

If you are divorced, you can close your accounts or joint accounts in which your former spouse was an authorized user. Or ask the creditor to convert these accounts to individual accounts.

According to the law, the creditor can not close a joint account because of a change in marital status, but may do so at the request of either spouse. The creditor, without however, no change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis, then, depending on your new application, extend or deny credit. In the case of a mortgage or home equity loan, a lender is likely to require funding to remove a spouse the obligation.

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