Ex-Spouses Can Ruin Each Other's Credit

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Dear Alpha Consumer,

After finding out I had numerous collection accounts on my credit, I ordered credit reports from the three major credit bureaus, TransUnion, Experian, and Equifax. I discovered that my ex-wife must have used my name to lease equipment, which led to the collection accounts.

I would like to clear the accounts from my credit report. How can I do this?

The best way to clear up your credit depends on whether or not you are a victim of identify theft, says David Rubinger, spokesman for Equifax. If your ex-wife used your name and Social Security number to take out credit without your knowledge, then she has stolen your identity.

To the credit reporting agencies, it doesn't matter if you've been victimized by a stranger, a friend, or an ex-wife. Shutting down the unauthorized accounts, filing a fraud report with the police, and telling the credit reporting agencies to place a fraud alert on your account are the first steps to reclaiming your credit.

If, on the other hand, your ex-wife is simply using credit cards that you previously owned together, then the situation is a bit stickier. If you are still registered as a co-owner of the credit card that she uses, you are probably still liable for any charges made on it, explains Experian spokesman Rod Griffin. "If you have a joint account, you're considered fully responsible for that debt," he says. (Griffin adds that in some states with community property laws, all accounts opened during marriage are considered joint, regardless of whose name is on them. The Internal Revenue Service publishes an overview of the tax-related laws in community property states, which include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.)

You can, however, still file a dispute with the reporting agencies, as well as with the store where the equipment was leased. You have the best chance of being successful if you clearly explain the situation and why you should not be liable for the charges. The reporting agencies have 30 days to investigate and respond—but unless you have a good reason why you're not responsible for the charges, such as identify theft, then you're probably out of luck.

Post-divorce credit problems, which are common, usually can be avoided by closing joint accounts. "The safe thing to do is to cancel all the cards and make both spouses get cards in their own names," says Evan Hendricks, author of Credit Scores & Credit Reports.

The Federal Trade Commission warns divorcing couples that the divorce decrees they negotiate, such as a commitment that one ex-spouse will pay off credit card debt, does not absolve the other ex-spouse from responsibility from the perspective of the credit reporting agencies. Creditors can still demand payment from the other spouse, which can negatively affect credit scores if it goes unpaid.

In other words, your financial life may still be intertwined with your ex-wife's, even long after the marriage is over.