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My friend Jill has recently been through a divorce and somehow the matrimonial suite affected her credit score and the whole credit history. As a result she found herself unable to qualify for even a small loan, let alone apply for a car loan or mortgage. She got crippled by financial impotence and the fact made her suffering twice as stronger…
How could her credit cards have possibly been affected during the proceedings and how can she try to restore her credit score and eligibility? Jill came to me for the answer as I have lived through the same situation which had me struggling both for my inward peace and financial stability.
Well, I wouldn't go deep into consolation words and will move on straight to Jill's story and my lesson on how to manage your credit card accounts and dispose of your credit cards when you go into married life. If you are on the way, pick up your ears or better strain your eyes, as the following guide will protect you from unnecessary trouble and bitterness to follow.
So, if you are just getting married, it doesn't mean that such word as divorce comes somewhere from a different reality and has no concern to you whatsoever. Just on the contrary. The divorce procedure discloses both the spouses' credit histories and makes both of you pay your obligations.
That's where the core of the problem hides and it goes as this - whether you and your spouse have a separate or joint credit card account. This fact is going to affect your future eligibility for credit and the whole financial standing after the divorce and it doesn't matter what credit card company you stick to. What do I mean?
I mean that if you have a joint credit card account with your spouse, you both are responsible for paying credit cad bills and killing credit card debt if such one appears. So what did Jill and her husband Mark do? Their desire to get an instant credit card approval prompted them to fill out join credit card application which combined the information on their financial assets, income and good credit histories and that made their case much stronger and better risk in the eyes of the creditor.
Here they are. The happy couple got their no annual fee credit card in their pocket and started paying with it using the joint credit card account. In their case, it was Mark who handled credit card bills but, as dictated by the rule, all the information on payments is reported in both the names.
According to Jill's words, everything was smooth and faultless as far as the credit card use went. The irreproachable credit history and high incomes of both the spouses made them enjoy the lowest interest rates and great points rewards on their MasterCard and such apparent opportunities besotted Mark...
Late and skipped credit card payments together with constantly exceeding the credit card limit did its part and it worked destructively for Jull's credit score though she herself made only the small part of all purchases using their credit card.
The hardest part of the thing came when the divorce procedure itself took place. In spite of the fact that Jill was perfectly responsible for her part of monthly payments, the divorce decree required that she fulfilled the obligations of paying off the due bills!
What is it? It cannot be just a mere misunderstanding - it is a blunder! But these are just the words of person thinking he is unfairly treated. The truth is the late or missed payments of your husband or wife inevitably appear on your own credit report. That's the hard price of applying for credit together.
This is Jill's sad story and it is sure to take her much time and effort to get back on track of good credit score and strong finances.
Putting my own experience and this very story as an example, I strongly recommend young people going into a conjugal life to have individual credit card accounts rather than joint. You will always be responsibly only for your own debts and no one's bad spending habits and credit management will affect your credit history.
There are some interesting things to mention about having a credit card account in one of the spouses' name only, but it is a different story and I'll dwell on it later…