Divorce can be heart breaking for anyone, but Credit problems can make the process even more stressful. An important issue during some divorce proceedings is the Status of joint credit accounts and who is responsible for them. If your former spouse ignores their Responsibility to pay a debt on a joint account it could seriously impact your credit score.

If you have recently been through a divorce or are planning to seek one, you need to look closely at how divorce can affect your credit rating. Reviewing the different kinds of credit accounts opened during your marriage will help you avoid the credit nightmares that plaque many recently divorced couples.

There are two kinds of credit accounts: individual credit accounts and joint credit accounts. When you fill out an application for credit, whether for a Credit Card, auto loan, or mortgage, the application will ask if you want an individual account or a joint account.

With an individual account only your income, Credit History, and assets are scrutinized in the application process. You alone are held responsible for paying this debt back. Whatever your marital status, you will be held responsible for the credit card or loan payments. Under this Type of agreement, you may elect to add someone to the account as an Authorized User, which means they can charge on the account. However, adding an authorized user does not release you from sole responsibility for repaying this debt.

The Advantages and Disadvantages of Individual Accounts:
If you're not employed outside the home, work part-time, or have a low-paying job, it may be difficult to qualify for some loans without including your spouse's income in your application. However, if you open an account in your name and are solely responsible, no else (including your spouse) can negatively affect your credit record.

When you apply for a joint account, both you and your spouse's income, debts, assets, and credit history are considered when lenders review your application. You are both responsible for the debt. The upside to a joint account is that it often presents a stronger financial picture to lenders, especially if you have two incomes. The downside to a joint account is that because two people applied together for the credit, each is responsible for the debt.

The Advantages and Disadvantages of Joint Accounts: 

A joint application may help you present a stronger financial picture to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns each spouse the obligation to pay specific debts. If your former spouse doesn't make their payments on a  jointly-held account it can hurt your credit history as well as theirs.

If you are contemplating a divorce, it is essential to review the status of your credit accounts. During the proceedings, it is important that the bills be paid on time because late payments may hurt both you and your spouse’s credit score. It is very important to remember that as long as there is money owed on an account both you and your spouse are responsible for paying it. 

You may think you are in the clear because the judge ordered your spouse to pay certain debts. Court orders mean little to credit card and loan companies.  If you applied jointly, you are still responsible for the debt and any late or missed payments will appear on your credit report regardless of the court order.

You should also keep in mind that, by law a creditor cannot close a joint account just because of a divorce, but it can be done by the either request of either spouse. Additionally, the creditor is not required to change joint accounts to individual accounts. The creditor can require you to reapply on individual basis and then extend or even deny you credit based on the new information that you provide about yourself.

When a divorce takes place, it usually best to close your joint accounts or accounts in which your former spouse was an authorized user. This is the best way to avoid future problems and protect your credit history.