I Want To Show You How To Protect Your Credit

Credit held jointly can haunt you. especially after a divorce. What most divorced couples find out after it's too late is that both borrowers on a joint account are responsible for the loan- regardless of what the judge says- until the loan is either paid off or refinanced in one person's name.

With the divorce rate as high as it is( about 43% of all first marriages end within 15 years according to a study by the National Center for Health Statistics) be sure of your long- term relationship before you eagerly enter into a loan together. And if your ex- spouse is more than 30 days late paying the bill, your credit reports will also be affected negatively and your credit scores will plummet. A couple gets divorced, the judge says the husband is responsible for paying off the credit cards and loans, and the wife goes home happy, thinking she's off the hook( or vice versa) . I' ve seen it happen hundreds of times. Then, a few months later, after the ex- husband fails to make payments or defaults on some loans, the ex- wife's credit scores sink. What I' m trying to say is that a mean- spirited spouse can continue to ruin your credit for many years after a divorce by making late payments( or not making them at all) on any credit held jointly.

And keep sinking. And if you cannot afford to pick up the slack. things will be rough. You have to be proactive and get your name off of all joint accounts. or volunteer to be responsible for all joint accounts to ensure they get paid on time. So remember, just because a judge says it's so- doesn' t make it so. For some real world advice. read a collection we' ve compiled from divorced Life After Bankruptcy readers to give you a balanced perspective. Of course, I' m not trying to promote divorce. Go here to download the report.

I want to show you how to protect your credit. OK, let's say that you have really low credit scores and your spouse has great credit scores. How the spouse with good credit can speed up the recovery of the spouse with bad credit. The best way for you to increase your scores is to have your spouse add you as an authorized user to their credit card accounts. But here's the interesting part. As an authorized user- you' ll get a new credit card with your name on it- but the primary card holder will still be responsible to pay the amount owed, regardless of who charges on it.

Most lenders will report the entire credit history of the account on the authorized user's credit reports. But, don' t pick just any card to be an authorized user on. So, you instantly get a good credit history added to your credit reports! You should choose the accounts wisely. Another word of caution. I would select the oldest accounts, with the highest credit limits, that have the lowest balances.

Just remember, if you' re the primary cardholder and any of your authorized users go on a shopping spree, then fly the coop- you' re still responsible for the balance owed. ".But my husband charged my account to the hilt and left me. " Doesn' t matter. ".But my husband lied to me, and left in, stole my children the middle of the night without me. " Lenders don' t care. ".But my wife was having an affair with the pool boy and maxed all of my credit cards that she was an authorized user on. " Tough luck. Lenders don' t care what's going on in your personal life. You get the idea. All they care about is that the balance gets paid. And if you' re going to become the authorized user of your spouse's credit card, make sure everything's going OK at home first and that there are no surprises around the corner. So, if you have good credit, please think twice about sharing it. Sometimes it's just about your FICO credit scores. putting your best foot forward.

For example, when you apply for a department store credit card, there's no negotiating. When applying for credit cards your scores are either high enough to qualify or they aren' t. You' re either approved or not. So put your best foot forward at the beginning. The decision is based on one of your FICO credit scores. The person who has the highest FICO credit scores should apply for credit.

When it's time to apply for new credit it's all about who has the highest FICO score from the credit reporting agency the lender uses to make a lending decision. Michele and I do this all the time. Sometimes my scores are higher. It doesn' t matter to us whose scores they use, we just want to qualify for the best terms. Sometimes hers are higher. In fact, the" putting your best foot forward" strategy isn' t always exclusive to credit cards- it works with any lender that makes lending decisions based primarily on FICO credit scores. When I decided to keep it a little longer, my scores were high enough to get the best terms- so I refinanced using my scores.

For example, the car I' m driving right now was originally financed by one of my wife, Michele's FICO scores. You can purchase your credit scores to determine who should be applying for unsecured credit cards right now. Once approved, you can add your spouse to the account as an authorized user. "By the power vested in me. Preferably whoever has 700+ scores. I now pronounce you. finished reading this article. "