Separating Joint Accounts After Divorce: How to Protect Your Credit Score and Credit File

Start Here: Why Divorce Doesn't Separate Your Credit on Its Own

Your credit report doesn't list whether you're married, single, or divorced, and your marital status isn't part of any credit score. What affects your credit after a divorce is how the accounts you shared get handled. Experian notes that credit files aren't merged during a marriage in the first place, so there's nothing to "split." What you do need to untangle are the joint and cosigned accounts that carry both names.

The most important fact to understand before you do anything else: a divorce decree doesn't change your contract with a lender. The CFPB explains that a decree or property settlement can assign a debt to one spouse, but a creditor can still collect from anyone whose name is on the loan or account, unless the creditor releases you or the loan is refinanced without you. Sending a creditor a copy of your decree doesn't end your responsibility on a joint account, and taking your name off a car or home title doesn't take it off the loan.

So the goal is simple to state and slower to finish: make sure every account that still has your name on it is either paid and closed, converted to an individual account, refinanced, or watched closely until it is.

Step 1: Pull All Three Credit Reports and Make an Inventory

You can get free credit reports from Equifax, Experian, and TransUnion every week at AnnualCreditReport.com, the official site for free reports. Pull all three, since each bureau may not have every account.

For each account, write down:

• How you're listed: individual, joint account holder, cosigner, or authorized user. This matters a lot (see below).
• The creditor, account number, current balance, and credit limit.
• The payment status: current or late, and any recent late payments.
• Anything you don't recognize. Accounts you never opened, or balances that look wrong, are worth investigating right away.

Our free credit report audit checklist walks you through each section of a report so you don't miss anything.

Step 2: Know the Difference Between Joint Holders and Authorized Users

The right move depends on how each person is attached to the account.

• Joint account holder: Each joint holder is responsible for the full balance, and the card company can collect from either of you, according to the CFPB. Experian notes that you generally can't simply remove one name from a joint credit card.
• Authorized user: An authorized user generally isn't responsible for the debt, per the CFPB. The primary cardholder can usually have an authorized user removed by calling the issuer, and Experian notes this can be done even if the card has a balance.
• Cosigner: A cosigner is responsible for repaying the debt if the borrower doesn't. Treat a cosigned loan the same way you'd treat a joint one.

If you're an authorized user on your ex's card, ask the issuer to remove you. If your ex is an authorized user on your card, have them removed, too. Keep in mind that removing an authorized user can change that person's credit profile, since the account's history may no longer show on their report.

Step 3: Decide What Happens to Each Joint Account

There's no single right answer for every account, but Experian and the CFPB point to the same basic options.

Joint credit cards

• Pay off and close it. Experian says you can generally close a joint card once it has a zero balance and both holders agree. Closing stops new charges, but under the CFPB's guidance each joint holder is still responsible for any balance left on the account at the time it's closed.
• Split the balance. If there's a balance you can't pay right away, Experian describes each person opening their own card that allows balance transfers, moving their share of the balance there, and then closing the joint account. Check the transfer fees and promotional terms first. Our balance transfer payoff simulator can help you compare the cost.
• Ask about converting it. Some issuers may let you convert a joint account to an individual one. They don't have to agree, and they'll often review the remaining person's credit and income.

Mortgages, auto loans, and other installment loans

Secured loans are tied to property, so separating them usually means one person refinances the loan in their own name or the property is sold and the loan paid off. A refinance is a new credit application, so expect the lender to check credit and income. Until the original loan is paid off or refinanced, both borrowers remain responsible for it, no matter whose name is on the title.

If you can't separate an account yet

Sometimes an account can't be closed or refinanced right away. While it's open with your name on it:

• Keep paying on time. Missed payments on a joint account can show up on both your report and your ex's, even if the decree says your ex is responsible. Experian recommends making at least the minimum payment on joint bills during divorce negotiations.
• Set up alerts and watch the account. Sign up for the account's online access or statement alerts if you can, so you see a missed payment quickly.
• Put it in writing. Experian suggests telling creditors in writing that you aren't responsible for charges after a specific date and keeping a copy. This may not stop a creditor from trying to collect, but it documents what you did.

Always get written confirmation from the creditor when an account is closed, converted, or refinanced, and save it with your divorce paperwork.

How Separating Accounts Can Affect Your Credit Scores

Closing accounts and opening new ones aren't neutral events for scoring. Experian notes that closing joint accounts, coming off an authorized-user account, and applying for new credit can change your credit utilization, the length of your credit history, and your recent inquiries.

• Credit utilization: This is the share of your available revolving credit that you're using. If a closed joint card had a high limit and a low balance, your overall utilization can go up when it closes. You can see the effect of different balances and limits with our credit utilization impact calculator.
• Account history: Closed accounts don't disappear right away. Experian says closed joint accounts, including your ex's name and the payment history, can stay on your reports for up to 10 years after they're closed.
• New applications: Refinancing or opening new cards usually means a hard inquiry, which can have a small, temporary effect on scores.

None of this means you should keep a risky joint account open just to protect a score. The CFPB's point stands: while your name is on an account, you're on the hook for it. Weigh the possible score changes against the risk of being responsible for someone else's spending.

What to Do If Your Credit Report Is Wrong After the Divorce

If a report shows something inaccurate, such as an account that was closed but still reports as open, a balance that's wrong, or an account you were never on, you have the right to dispute it under the Fair Credit Reporting Act (FCRA).

• Dispute with the credit bureau. Under FCRA section 611, the bureau generally must investigate and finish within 30 days of receiving your dispute. In some cases, such as when you send more relevant information during that 30-day period, it can take up to 45 days.
• Dispute with the company that reported it (the furnisher), too. The CFPB recommends disputing with both the bureau and the furnisher.
• Send copies, not originals. Include supporting documents such as the creditor's written confirmation that the account was closed or refinanced.

Be aware that a dispute only fixes information that's inaccurate or incomplete. If a joint account accurately shows a late payment that happened while your name was on it, a dispute generally won't remove it, even if the decree says your ex was supposed to pay. That's an issue to raise with your divorce attorney.

You can start with our free credit report dispute letter or build a custom one with the iRunCredit document generator.

If a Debt Collector Contacts You About a Shared Debt

The CFPB says a collector can generally contact you about a debt if your name is still on it or you're otherwise still legally responsible. If you don't think you owe it, or you don't recognize it, you have rights under the Fair Debt Collection Practices Act (FDCPA).

• Watch for the validation notice. A collector must give you information about the debt, including the amount and the creditor, either in its first communication or within five days after it.
• Dispute in writing within 30 days. If you dispute the debt in writing within the 30-day period described in the notice, the collector has to stop collecting until it sends you verification.
• Keep records. Send letters by a trackable method and keep copies.

Our debt validation letter gives you a starting point.

Watch Out for Credit Repair Promises

Divorce is stressful, and some companies use that. Under the Credit Repair Organizations Act, a credit repair company can't charge you for a service before it has fully performed it, and it can't make untrue or misleading claims about what it can do. Disputes are meant to correct information that's inaccurate or incomplete, so be wary of anyone who promises a specific score increase or says they can make accurate negative items disappear. Disputing errors with the bureaus and furnishers is free, and you can do it yourself.

Rebuilding Your Own Credit Profile

Once the joint accounts are sorted out, focus on building credit in your own name.

• Open individual bank accounts so your money and bills are separate.
• Build a budget around your new income and expenses. Our debt payoff planner can help you map out any debts you've taken on.
• Add individual credit carefully if you need it. If you don't have much credit in your own name, a secured card may be an option. Our secured card fit checker can help you think it through.
• Pay every bill on time. Payment history is one of the most important factors in credit scoring, and it's the part you control most directly.
• Check your reports again after each account is closed, converted, or refinanced to make sure it reports correctly.

What to do next

Start with your credit reports and the credit report audit checklist to list every joint, cosigned, and authorized-user account. Then contact each creditor about your options, and if something reports incorrectly, put your dispute in writing with a credit report dispute letter.

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Not legal advice. This article is general consumer education about credit reports and joint accounts after divorce. It isn't legal, tax, or financial advice, a guarantee of any credit score or reporting outcome, or a substitute for advice from a family law attorney about your situation. State laws, including community property rules, vary.

Sources: CFPB: Can a debt collector contact me about a debt after a divorce?, CFPB: Am I responsible for charges on a joint credit card account?, CFPB: How do I dispute an error on my credit report?, CFPB: What a debt collector must tell me about a debt, FCRA section 611 (15 U.S.C. 1681i), FDCPA section 809 (15 U.S.C. 1692g), Credit Repair Organizations Act (15 U.S.C. 1679b), Experian: How to manage your credit during a divorce, Experian: Removing an ex-spouse's name from your credit report.