I am thinking of divorce, and I don’t know what to do about my credit cards. Will I be able to get credit after I divorce, or will I have to start over?
First of all, this is a great question, and you are smart for thinking about your credit before you get divorced. Too often, women only start thinking of credit after they are divorced and suddenly find that they can’t use their old cards or have trouble qualifying for a loan.
If you are considering divorce, it is important that you start taking action on your credit before you make any major moves. Make sure that your bank cards and department store cards are in your own name. If you are only an authorized user on your husband’s card, then he can easily cut off your access and cancel the cards without your permission.
If possible, you should obtain cards with check-writing privileges, so that you will have a source for emergency funds if your cash reserves run low or are frozen by restraining orders during the divorce.
Women who are in the process of divorcing and receive spousal support or child support from their former husbands sometimes have tremendous problems getting credit. Credit institutions are required to take these support payments into account only if you have received them regularly in the past and it is likely that you will continue receiving them in the future. But if you are in the process of divorcing, your support payments have probably been set under “temporary” orders, which by their very nature are subject to change. Credit institutions may therefore deem those payments unreliable and may choose not to consider them in deciding to grant you credit.
While you are in the process of divorcing, your debt obligations may include amounts that your spouse has agreed to pay, such as the house payment if he is still living in the house, or a credit card that he uses exclusively. Even though the two of you have agreed that he will make those payments, the credit institution will consider those obligations to be yours as well if you signed the loan application papers. That can keep you from getting the credit you need. For example, you may find that you are unfairly denied a car loan when the loan payments would fit easily within your budget.
Be aware of these possible challenges. It may be a good idea to apply for credit cards in your name or take out any loans that you anticipate needing, before you get divorced. (Learn how to Clean Up Your Credit before your divorce.)
Have more questions about money before, during, and after your divorce? Talk to professionals in the divorce industry at your next local Second Saturday Divorce Workshop. Find a workshop near you.