A member recently wrote asking whether she needed to be legally separated from her husband to get the credit bureaus to separate her credit history from his. Her reason: The couple doesn't agree at all on their spending. The hitch: She doesn't work right now.
The answer to her question is no. You don't technically need to be legally separated to free yourself of his blackened credit history. But the key is joint accounts. Any joint credit-card accounts, mortgages, outstanding loans or brokerage accounts that are held in both names will be reported to the credit bureaus in both names, and there is no escaping that. It's the law.
Want a clean slate? You'll have to close out your joint accounts and open separate accounts. That will be hard without an income.
A History of Your Own
Before you separate from your husband, it's vital to establish your own credit record, by having a credit card in your name alone. If you don't have one, apply for one immediately, before you consider separating.
Choose a Visa or MasterCard. Department store cards and American Express do not have the same credit clout. Store cards typically carry lower balance limits, and since American Express requires that you pay in full each month, it is not seen as an indicator of how you handle credit that revolves each month. Make sure you pay off your balance each month, regularly.
A healthy credit history is worth its weight in gold. Without income, you might need to look into a secured card, which is fairly easy to land. They work just like any other MasterCard or Visa, but you have to leave an interest-earning deposit in the issuer's bank.
The more cash you put in, the more you can charge. The bummer is that cards often have high interest rates, so you need to try to pay in full each month to show a pattern of timely payments.
After you have your credit in place, you can close your joint accounts. You must inform the card companies in writing that you want the accounts closed and will not be responsible for any charges from that time on. The balance must be paid off before they will shutter the accounts. In general, women who are separated but not yet divorced should close any joint accounts.
Remember, too, that any previous information that is negative will linger on your credit history for up to seven years. "Don't be afraid to dispute any items listed on your credit report for accounts that are not listed in your name," said Gerri Detweiler, author of The Ultimate Credit Handbook and co-author of Invest in Yourself: Six Secrets to a Rich Life.
It is always smart to obtain a copy of your credit report whether you disagree with your spouse's freewheeling spending or not. You are entitled to a free copy if you have been denied credit within the previous 60 days because of something in your credit report. In most states, if you have not been denied credit, you will have to pay about $8 per copy.
Here's what you must provide in order to obtain a report:
- Full name
- Current home address and addresses from the past five years complete with ZIP codes
- Telephone number
- Date of birth
- Spouse's name
- Social Security number
- Proof of identity
Make sure you indicate why you are asking for a report.
Here are the three major credit bureaus to write or call for a report:
- Equifax. P.O. Box 105783, Atlanta, Ga. 30348, 800-685-1111
- Experian: P.P. Box 2104, Allen, Tex. 75013, 800-682-7654
- Trans Union: P.O. Box 390, Springfield, Pa. 19064-0390, 800-888-4213