How will divorce affect your credit? It is imperative that you understand the different types of credit accounts attached to your marriage, and what divorce can mean for those accounts and your credit.

Why It Matters: Knowing what types of accounts are available and what it means for your credit should you get divorced will enable you to make wise financial decisions.

What You Need to Know: Choosing to open individual or joint accounts and allowing your spouse to have authorization on those accounts will impact your credit after a divorce. Learn what types of accounts there are, and what happens to them when you are granted a divorce.

a.       Individual accounts. This type of account is solely tied to your credit history. You are responsible for this account whether you are married or single. You may authorize your spouse to be on this account, but they will not be responsible for the debt on it.

2. Joint accounts. These are based on both you and your spouse's credit history. Both parties are equally accountable for this account, no matter who earns more or who is employed or not.

Once you are divorced, you are not automatically released from your debts with your spouse. Any individual accounts on which you have granted your former spouse authorization are still your responsibility. Your accounts are not automatically closed or converted to individual accounts following a divorce. Creditor's can only close a joint account upon a spouse's request. If you wish to convert a joint account into an individual account, your creditor may have you reapply for credit on your own.

Steps to Take:

1. If you are pursuing a divorce, consider removing your spouse from your individual account
2. You and your former spouse should apply for separate accounts and close any joint accounts you may hold
3. Make wise decisions when it comes to merging your finances with someone else's. If your partner is irresponsible with their finances, it would probably be best to keep separate accounts.

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