Credit Reports and Divorce

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During a divorce, “credit” can have great importance, as a strong credit rating by one spouse could make the difference in refinancing the marital residence, or a poor credit rating could mean choosing how to distribute debt versus declaring bankruptcy. Having an accurate credit report for each spouse could help the process in working out a reasonable division of property. It could also help reveal whether one spouse has been less than forthcoming about their spending habits.

Some spouses want to gain access to the credit report of their soon-to-be ex for a variety of reasons, including hidden credit cards that might lead to proof of an affair. And while these reports might provide such proof, spouses who attempt to access these reports without the consent of the other spouse will face legal consequences.

Under the Fair Credit Reporting Act, consumer reports are not available to anyone upon request. To the contrary, your financial history is protected from disclosure except in limited cases and of course your own consent. That is why when you go to fill out a credit application or apply for a car loan you have to sign certain consent forms. So, if your spouse does not want to consent but you happen to know your spouse’s personal information to make an online inquiry, doing so would be illegal in multiple ways. If your attorney thinks the credit report is worth obtaining, he or she will use proper discovery tools to do so.

You can have access to your own credit report at any time, and you should certainly consider doing so early in your divorce and monitoring it throughout, as it is possible that your spouse may attempt to either access your credit information or try to use your name to establish a new joint credit card or run up a tab on an older card you did not know was still active. Monitoring your credit is critical during divorce to be sure you emerge post-divorce with a clean and strong credit rating.

If you have poor credit, you want to use your report as a way to find your bottom out point – what can you continue to afford after divorce without declaring bankruptcy. Having a thorough credit analysis could help you negotiate for a property settlement that leaves you with a better credit rating and the chance to rebuild financially rather than face a financial meltdown right after a divorce.

If you have additional questions about credit reports and divorce, contact us – we can help.