How to Untangle Your Credit When You Divorce

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A divorcing couple reads through piles of paperwork
Valery Sidelnykov /

Going through a divorce can be emotionally draining, but it’s important to take time to separate your finances from those of your ex so you can build a credit history of your own.

In order to emerge from a divorce with a good credit record, make sure that all the bills you’ve incurred with your spouse are paid on time, says Beverly Harzog, a credit card expert and author of “The Debt Escape Plan.”

This will be easier if you and your spouse can work together. Creditors won’t give you a free pass if your soon-to-be ex fails to pay bills that he or she agreed to assume, warns Ally Abernathy, vice president of The Lenders Network. If your spouse falls behind on jointly held debts, “your credit will be negatively affected.”

Poor credit scores from the major credit-monitoring agencies — Equifax, Experian and TransUnion — can increase the interest rates you pay on loans after your divorce, and result in the denial of credit card applications.

Here are steps you can take to untangle your credit:

As soon as possible, close shared accounts

One way to protect your credit is to pay off and close accounts held in the name of both yourself and your ex. As long as you maintain joint credit accounts, you’ll be connected financially.

The sooner you close these accounts, the easier it will be for you to protect yourself from falling into deeper debt, says Allison Maxim, a Minnesota attorney who handles divorces. If you can’t pay off shared debts before you divorce, the responsibility for them can be divided up in your divorce decree.

There is a danger if you have a credit card in your own name and your spouse is an authorized user. “One of things I’ve seen happen is the other person will rack up debt on the card because they are not legally responsible,” says Harzog.

In such a case, the safest thing to do is remove your spouse’s authorization. Credit card issuers typically remove authorized users upon request.

Try not to pay more than your fair share

When paying off jointly held debts, it’s important to make sure you don’t assume a greater share of burden than you need to, cautions Brette Sember, author of “The Complete Divorce Organizer & Planner.”

Your divorce judgment could require your spouse to be responsible for more than half the amount, she notes. “If you pay it off together, before the divorce is final, you won’t get this benefit.”

If you can’t pay off jointly held accounts right away, you can freeze them “so your ex cannot rack up more debt on them, which you could be jointly responsible for,” says Sember.

In some cases, it may make sense to pay a delinquent bill that your spouse had agreed to pay, just to make sure a missed payment doesn’t show up on your shared credit report.

​”This is something you need to discuss with your divorce attorney,” says Sember. “It may not be a good idea to pay off a debt your ex ultimately will be responsible for. However, protecting your credit rating is important, so you have to make a measured decision.​”

Start building a credit history in your own name

As soon as you can, you should establish an independent credit history by opening bank accounts and credit cards in your own name, says Sember.

It’s hard to function in society without a track record of borrowing money and repaying debts. Lenders use ratings from credit-scoring companies to decide whether you’ll be a good risk for auto loans and home mortgages. Insurance companies often use these scores to help them decide how much to charge for policies, whether you’re buying homeowners insurance or insuring a car.

The most widely used credit ratings are FICO scores — created by Fair Isaac Corp. — which range from 300 to 850. The better your credit record, the higher your score will be. Generally, a very good score is above 740.

If the divorce means that you are starting over in the effort to build your credit, check out the advice in “7 Easy Ways to Build Credit When You’re Starting Out or Starting Over.”

Adopt good credit practices

Once you’ve finalized your divorce and established your own credit history, it’s important to follow good credit card practices, says Sember. That means not charging more than you can afford to repay on time.

Credit cards should be paid in full each month, she says. Otherwise, they become a means of creating more debt. To make sure you stay in control of your spending, she recommends opening just one or two accounts following a divorce.

“In general, you don’t want to take on a lot of debt right away, if you can avoid it,” she says.​

If you’re in the market for a new credit card, be sure to check out our credit card center, which helps you find the best of different types of cards — those that offer the best travel rewards, cash back, lowest interest rates and more.

Monitor credit accounts and credit reports

After your divorce is over and you’ve begun building your own credit history, there’s still a danger that your ex’s overdue bills will wind up on your credit report. The only way to know for certain is to carefully review your credit accounts and credit reports.

It’s wise to check your bank and credit accounts online daily to make sure there are no purchases you don’t recognize, says Harzog.

Equifax, Experian and TransUnion are required to provide consumers with free copies of their credit reports each year. You can find more information on their shared website,

There also are free credit-monitoring services, such as Credit Karma, that allow you to access your score at any time.

Track your spending

Just because you make it through a divorce with your finances intact doesn’t mean you’re home free. Many people fall into debt after a divorce, says Harzog. To combat sadness over the breakup, they often use credit cards to make purchases that aren’t truly necessary. Harzog calls this “retail therapy.”

“You’re very sad,” she said. “You have a credit card. You think, ‘Oh this outfit is perfect.'”

To help you build a good credit score and stay out of debt, Harzog recommends starting out by not using more than 10 percent of your credit limit on any single charge account.

Have you been through a divorce? Share your wisdom in the comments below or on our Facebook page.

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