Divorce: Establish Your Own Credit

It's important to qualify for credit in your own name so that you will have credit resources once the divorce is final. If you don't have an income of your own, a secured credit card may be the answer. A secured credit card is one backed by a deposit account at the issuing financial institution. Establish a checking account solely in your name for the same reason.

First, a checking account
Basic checking accounts are designed for day-to-day transactions and bill paying, so it's important that you establish one in your own name. A checking account is the foundation for personal finances. These accounts are readily available and easy to open. Find a bank that will offer both ATM and debit cards along with their checking package. Research the monthly fees associated with maintaining a checking account. Some banks charge very low fees. Others can be very expensive.

Second, a credit card
Regardless of your marital status, you should always have a credit card in your own name. It can help you keep up a good credit rating for when you need it. It can also be a powerful source of funds in case of an emergency.

Be sure to research which cards are right for you. Get information on selecting a credit card that suits your credit habits best.

Cut the ties
Once you have some credit in your own name, close or freeze all joint credit card accounts. You won't be able to fully close an account if the balance is not paid in full. But if you freeze the account you can be sure that no one can charge any more to the account. If the card issuer won't allow you to close the account on your own, and your spouse refuses to cooperate in closing the account, you can report the card stolen and that will automatically disable the account.

Review all of your joint accounts. If there are any accounts with your name on them, move promptly to take your name off of the account. This includes brokerage accounts or any other type of account that offers to advance any credit.

Once you have closed all the accounts you need to close, order a copy of your credit report. It can be quite a challenge to track all the accounts you and your spouse have opened. A credit report will help you find and close each one of them. If there are any left on your credit report, call the credit lender directly to close the account. Then order another copy of the credit report to make sure it was closed as you requested. Keep checking your credit report to make sure it is correct.