The statistics on the number of marriages that end in divorce are varied and open to interpretation, but what is certain is no one who enters a marriage with the person they believe to be their perfect match plans to experience the agony of dissolving the union.
As exhilarating as it is when you think you have found the person you will spend the rest of your life with, the realization that it is not meant to be is just the opposite. And if it wasn’t enough that the lifestyle two people have worked so hard to create is torn apart, a divorce can also wreck havoc on a person’s credit score. After the emotional and monetary sting of a divorce has started to subside, many people find they have also lost their good credit rating along the way.
The credit reporting system leaves much to be desired when it comes to accounting for a divorce and this is what makes a divorce one of the five credit killers according to the book “Credit Revolution: Path of the Smart Consumer.”
While married, you and your spouse are often times treated as equally responsible for repaying loans and other credit accounts such as your mortgage, car payments, and credit cards. When a divorce occurs, these responsibilities are divvied up between the two parties with each taking responsibility for specific accounts.
This reallocation of responsibilities, however, is often times ignored by creditors and is in no way reflected on your credit reports. Even with a decree of divorce entered by a court, when payments are missed, creditors can attempt to collect from both parties and report the delinquencies on both people’s credit reports. It doesn’t matter if you have been diligent about making sure all the payments for the debts assigned to you are on time and in full, your credit score could begin to plummet if the ex-spouse is slacking off on their responsibilities. And because you could have changed your address and contact information, you may not even know there is a problem with the accounts until they start showing up as delinquent on your credit reports.
While watching your credit score decline based on something completely out of your hands would be frustrating enough, for too many people, it doesn’t end there. If the ex-spouse completely succumbs to the weight of their financial responsibilities and declares bankruptcy, you may be left holding the bag. As a co-signer on their debts, or even simply a person who creditors consider responsible, you will be targeted as the only available option for collecting what is owed. In the eyes of the creditors, all the debts that you shared with your spouse before the divorce will now be your responsibility alone. Faced with the prospect of having to single-handedly pay the debts of two people by themselves, some divorcees end up having to declare bankruptcy themselves.
It is in a scenario like this that the astounding unfairness of the credit reporting system becomes apparent. It also serves as an example of why each and every one of us has the right to fix our credit by disputing any items in our credit reports, including bankruptcies, that we feel may be inaccurate, untimely, misleading, incomplete, ambiguous, unverifiable, biased or unclear.
Lexington Law helps clients dispute these types of questionable items and our credit repair services have helped our clients remove millions of negative listings including late payments, collection accounts, charge offs, and bankruptcies.