Credit Rating and Ex Partners

Is Your Credit Damaged by Your Ex?

Your former spouse or partner can have an impact on your current finance and here we will give you some tips to cut your financial ties. Applying jointly for credit to buy a car, negotiate a mortgage or having a joint bank account means you are linked in the eyes of credit reference agencies. If the other person then has financial difficulties you can suffer long term.

Credit references should be related to individuals not addresses but be wary.

Control Debts with your Ex

  • Talk openly about finance matters when you are together. Keep records
  • If you make any joint applications even if they are not taken up you will be linked to the other person. What is relevant is whose name is on the agreement, as this is the person who will be legally liable for the debt. If it is in joint names you both have ‘joint and several liability’ and both can be chased for the full amount.
  • Check your credit report with the main agencies, Experian, Equifax or CreditExpert, it costs a couple of pounds. Make a note of any details that are in joint names.
  • Settle any joint debts when you split. Then close the account and contact the lender to get them to update their records.
  • Tell utility providers, credit agencies and any other relationships with joint accounts that you have split up and that all joint accounts are now closed.
  • Notice of Disassociation can be placed on your credit file when for some reason a link ‘previously’ existed between you and another person but they do not cover previous debt issues, you need proof that the association has finished and thee ultimate decision is in the hands of the Credit Reference Agency.
  • Confirm for yourself that you have not given any guarantees on behalf of your partner or their debts. If you have you will need to negotiate an exit from the guarantee with your Ex and any lenders.

Other Potential Problems

  • Even well after the split keep monitoring your credit report to catch any lingering or resurfacing problems. Do this at least annually
  • Divorcees are not necessarily clear of former partner’s debts. Any assets awarded as part of the divorce can be reviewed for up to 5 years after the divorce if one of them is declared bankrupt. So seek legal advice in these circumstances.
  • Whilst living together a partner may grow an equity value by contributing to the costs of a mortgage for example. In those circumstances a creditor could claim part of the asset you thought was yours.