Brits have been warned that one thing could be “quietly” destroying their credit score. Getting a divorce does not automatically cut financial ties between a couple, and nearly seven million Brits have money trouble after a breakup. Experts say many do not realise their ex’s bad credit could still be dragging down their own score long after the split.
Financial links survive the split
According to Shivi Rajput, an expert family law solicitor at Stowe Family Law, splitting up does not affect your credit rating directly. But if you have taken out a joint mortgage, held a joint bank account, or even just had both names on a utility bill, you and your ex remain “financially associated” in the eyes of lenders – and that link does not disappear just because the relationship has ended.
So, years after a divorce, an ex-partner falling into debt, missing payments, or running into money trouble could still show up when you apply for a loan, credit card or mortgage – and drag your application down with it.
What the research shows
Rajput said: “Unless you actively apply for a ‘notice of disassociation’, you could still be financially linked to someone you haven’t spoken to in years, and their money troubles can quietly become yours.”
Research from credit agency Experian found nearly seven million Brits have experienced financial difficulties following the breakdown of a relationship. Almost half (47%) of people surveyed reported credit rating problems linked to a previous relationship. A third said they were still dealing with the fallout three years later.
Steps to take after a separation
Closing joint accounts too hastily can also backfire and dent your score, experts warn, meaning many people do not know the right order to do things in. Shivi Rajput instead recommends taking certain steps as soon as possible after a separation.
First, check your credit report. It will show the joint accounts and associations listed against your name. Next, work out with your ex which accounts will be closed, paid off, or transferred into one name. Once this is sorted, apply for a “notice of disassociation”. You can do this once your finances are separated – this formally asks credit agencies to remove the link between you and your partner.
But, a notice of disassociation only clears the link on your credit file; it does not deal with your legal financial ties. The only way to properly sever those is a financial settlement, usually agreed as part of the divorce process and sealed by the court as a consent order.
Watch out for child maintenance
There is also a lesser-known trap for separated parents to watch out for. Since 2015, missed child maintenance payments can be reported to credit agencies once a “liability order” is made against a parent who has not paid.
Ms Rajput added: “Divorce itself won’t touch your credit score, but the financial links built up during a relationship can, and without taking action, an ex’s money troubles could end up being your problem for years to come.”
