Q: My husband recently died, and now I find that the credit accounts that were in his name only have been cut off. Can creditors do this even if I have a substantial income from my husband’s estate?
A: Yes, if your husband’s credit accounts were in his name only, creditors may discontinue your use of them upon his death. You may, however, reapply for credit in your own name.
Q: I co-signed on a car loan for a friend who has since decided to stop making the payments. Am I responsible for this bill?
A: Yes. As a co-signer you are equally as obligated as your friend. To protect your credit, talk to your friend and urge him or her to resume making the payments. If this is not possible, see if you can arrange to sell the item that is secured by the loan-such as a car-and use the proceeds to pay off the loan in full. Before you co-sign a loan, know the facts: In 75% of all co-signed loans, the original signer defaults, leaving the co-signer to pay. Be sure you can pay off the entire debt yourself before you co-sign, because chances are excellent you’ll be paying it back alone!
Q: My spouse and I recently separated. Can I prevent my spouse from using our joint credit cards?
A: Yes-but only if you close the account. If either party of a joint account notifies the creditor that he or she wants to close the account, the creditor will close it. Neither party will then be able to use it. You can then apply for credit in your own name, based on your own credit worthiness. Remember, however, that while you have the power to close the joint account, you are still responsible for what has already been charged.
Q: I gave my credit card to my roommate to use for one small purchase and she ran up my balance so high that I cannot afford to make the minimum payment. Do I have to pay for the purchases she made?
A: Yes. Never lend your credit card to ANYONE! Unless your credit card is stolen and/or used fraudulently (without your knowledge) you are obligated to pay the debt. If you can’t afford to pay it, your credit will suffer.
Q: I am separated from my husband and receive monthly child-support payments from him. Must I disclose these payments when I apply for credit in my own name?
A: No, you don’t have to disclose monthly child-support payments received from your ex-spouse. However, if you decide to disclose them a creditor must consider child-support payments as part of your income, assuming the stability of these payments can be verified (usually by canceled checks, or bank statements).
Q: Must credit bureaus maintain separate files on me now that I am divorced from my spouse?
A: Every credit report is for an individual, regardless of their marital status. However, that information may include your credit history on accounts that you held jointly with your spouse prior to your divorce, or information on accounts that were in your spouses name but authorized for your use.
Q: I was turned down for credit because I don’t have enough of a credit history. How can I get credit if I don’t have credit?
A: The thing to remember when you’re trying to establish credit is to think small. If you were turned down for a Visa or MasterCard (the big daddies of credit cards), go to a local department store and see if you can qualify for credit with them. You may also apply for a secured credit card with a local bank. A secured credit card requires a specified dollar amount to be deposited with the card issuer. These funds are then put on hold and a credit card is issued with a line of credit equal to the amount you have on deposit. If you make payments as agreed for approximately one year, the creditor may then release the funds held as security and issue an unsecured card. Either one of these options will give you the opportunity to create a credit history.
Q: My former spouse was a poor credit risk and had an unfavorable credit history. Can I be denied credit after we divorce based on information creditors receive about accounts I shared with my ex-spouse?
A: If you had a joint account with your former spouse and there is accurate negative information on that joint account–such as late payments or a “charge off”– then you could be denied credit based on that information. When you have a joint account you are both responsible for that account. Accurate negative information will remain on your credit report for seven years.
That is why it is extremely important to pay attention to your credit report, especially if you are going through a divorce. If you and your spouse have a joint account and you agree in the divorce settlement that one of you will be responsible for that account, remember that your creditor did not agree to this arrangement. This means if the spouse who agreed to pay the debt in the divorce settlement does not pay, the creditor has every right to collect the money from the other spouse. If the account has late payments and/or is “charged off” that negative information will appear on both credit reports for seven years.