One tragic outcome of a divorce is that each partner more than likely will have damaged credit and be in need of credit repair.

But, a large number of my students and coaching clients  are severely damaged by divorce. There are a few things to consider to keep your credit protected.

Most couples merge all their finances during marriage and then one spouse manages everything. During divorce you will want to separate all accounts. Be aware of what accounts you have and whose name is on them. A joint account has both spouses names attached and both are responsible for seeing that any debt is paid. If the divorce decree states that one spouse is responsible for paying the credit card bill both parties are still responsible for the balance. Creditors do not know who agrees the pay the card and they do not care.

Quite often a joint account will remain open and one spouse will run up a large bill. Both spouses are responsible for this even after divorce. If you and your spouse have a joint account you will want to call the creditor and change it to an individual account. Creditors are not obligated to do this. They can require you to reapply as an individual. An account must be paid in full before it can be closed or changed.

If you have an individual account with an “authorized user” you will want to remove the authorized user. As long as they are authorized they can fully charge the card. The only person responsible for any debt is the account holder. Typically, the account is reported on the card holder’s credit and the authorized user’s credit. If you are an authorized user and the account goes negative it may affect your credit.

You will also want to dissolve any other joint accounts including bank accounts. When cancelling a bank account be sure to do it together, the legal way. You also may want to just remove one of the spouses name and divvy up the funds accordingly. You will also need to remove one spouses name from any joint loans including auto.

Deciding what to do with the house can be a little trickier. On a home loan it is not as easy to just drop one person’s name from the account. If one person decides to keep the house they will need to refinance the home in just their name. If this is not possible, the best thing to do to protect every one’s credit is to sell the house and divide the profits. Many divorcees have found their credit destroyed after their former spouse let the home foreclose. Informing new creditors that you are divorced and not responsible for the debt will not help you.

Once you dissolve all joint accounts you will probably be left with some liquid assets. With the help of your attorney you can divide any remaining cash. This is the legal and most sensible thing to do.

You will also need to notify all creditors and banks of your divorce. If a collector is calling on a debt that you are not legally responsible for you will want to let them know that you are no longer married and therefore not responsible. You may also want to notify them in writing to expedite the filing,

Once you get all your joint accounts closed and everything settled it is important that you check your credit regularly. Quite often people are surprised when, months later, something belonging to their former spouse pops up on their credit. Be sure to read over your credit report carefully looking for accounts that are not yours. Even if it is a positive account you will want to have it removed. You never know what might happen with an account. Be sure to check your credit on a monthly basis. If there is a problem, you may want to learn how to improve credit score

Divorce can be a very difficult and emotionally challenging time. Credit issues and high court fees do nothing to ease the situation. If you are separating from your spouse or thinking about divorce, take the proper steps to separate your finances and all accounts. Our world today is run off credit so it is important to protect it. By taking these measures early in the process you will prepare yourself for a new life that is not held back by a low credit score.

To learn more tips on how to fix bad credit, visit my website at www.CrushingTheCreditBureaus.com

I recently read another article about credit repair companies scamming consumers. Remember, there is nothing one of these firms can do for you that you can’t do yourself…cheaper, better, and faster!

Improve your credit score can be done in short order if you follow proven principles.

Here is the full article -

Jefferson City, Mo. – Attorney General Chris Koster said today difficult economic times have created profitable opportunities for credit repair scam artists.

Koster said credit repair scammers target consumers with credit problems and charge big up-front fees with the promise to clean up their credit file.  He reminded consumers that it is against the law in Missouri to require payment before these types of services have been provided.

“The fact is, no one can clean up your credit report if it’s accurate,” Koster said.  “Companies that tell you they have an ‘in’ with credit bureaus, know about secret loopholes, can convince a creditor that you don’t owe a debt, or can get you a new, clean credit report are simply being untruthful.  If there are genuine errors on your credit report, you can get those removed yourself at no cost.”

Koster said he is filing a lawsuit today against Credit Repair and Counseling Specialists, LLC, and Brenda Lynne Coday in Springfield, charging fraud, deception and failure to comply with statutory requirements placed on firms offering credit repair services.  According to the lawsuit, the business did not perform all the services for customers it promised, and did not provide refunds for services not provided.

Koster is asking the court to issue a permanent injunction requiring Credit Repair and Counseling Specialists and Coday to comply with the law; require the defendant to provide full restitution to victims; pay a civil penalty of $1,000 per violation; pay the state 10 percent of the total restitution; and pay the cost of investigative and prosecution fees.

   I hope everyone’s Holiday Season is going well and not frustrating you too much! I have been attending several holiday parties and various functions the past few weeks and one question that I keep getting over and over when people find out what I do is…”Hey Mark, I have things in my credit that I want to get removed, do I really need to hire a credit repair expert, or can I do it myself?”

   I always answer the question with “It Depends.” You see, every credit report is different. And every person’s situation is different. Some need credit repair RIGHT NOW due to a probable real estate transaction and others can wait a bit. I also ask the question of how organized and disciplined a person is with mundane tasks such as repetitive phone calls and letters. While there is no easy answer, allow me to shed some light on the subject:

   If you have been having credit problems and your score has been lowered due to these struggles, you may want to check with a credit repair expert to get the help you need.  Credit problems can affect all areas of your life.  Unfortunately, for most americans, more and more companies are now wanting to pull people’s credit reports for every reason imaginable. 

   With the economy in the shape that it is, more and more lenders, credit card companies, and banks do not want to lend to people any longer or give out good loans, unless you have perfect credit.  Not only that, but many companies that you may not even think about want to pull credit reports now as well.  Companies like car insurance agents, health insurance companies, and even jobs as well. 

   The idea that if you have a negative credit score that will mean you will not pay your premiums or be reliable at your job.  Many times you can lose job opportunities or receive poor health and car insurance costs.  These are not the only companies that want to do this, more and more companies are looking for reasons to pull consumer credit reports.  With this happening, repairing your credit report becomes even more vital than ever.  Consulting with a credit repair expert means you will have a better chance of fixing your credit and eliminating these problems from your life forever.  There are few things that a credit repair expert can do for you, they are:

• Help you get your credit reports from all three credit bureaus.
• Go over your reports and make sure that all information is correct and accurately reflect your credit score.
• Help you to remove negative marks and incorrect information.
• Help with the letters and phone calls that will need to be made to make these corrections happen.
• They know all the credit rules and procedures to make sure that the information is corrected in a timely manner.
• Help with negotiations between you and the credit card companies and banks and lenders.
• Help you to lower your payment, remove the interest, remove late fees and over limit fees as well.
• If the credit repair expert you went to is a lawyer, they can also help to reduce the balances that you to pennies on the dollar.  Meaning you will end up only about half of what the original balances were.
• Many times all payments can be made to the credit repair expert for them to disperse out on your behalf.  They will make the payments to the credit card companies and banks for you, further eliminating some of the hassles for you.

   Going to a credit repair expert means you will be getting the advice and help you need.  You will be on your way to eliminating credit problems and on track for financial success and security again.  These experts specifically deal in these situations and problems, they know how to make sure the job gets done correctly and the way it is supposed to.  Achieving the raised credit score that you are looking for.

  Remember, there is nothing a credit repair company or credit repair expert can do for your credit that you can’t do for yourself. Usually, as with most things in life it comes down to two choices…money or time.

   Which one do you want to spend in getting your bad credit repaired and increase your FICO Credit Scores?

Talk Soon,

Mark