Why You Should Check Your Credit If You're Going Through a Divorce
Did you know that you're entitled to a free credit report from the major three credit reporting bureaus (Experian, Equifax, and TransUnion) once per year? Frankly, every person in every situation ought to take advantage of this opportunity, but it's even more important if you're going through a divorce, and you should do it sooner rather than later. Here's why.
1. After you're divorced, you will need good credit more than ever.
We typically think of needing a good credit history to qualify for more credit: house notes, car loans, credit cards, etc. But this isn't the only potential use of your credit history. Believe it or not, you may need good credit to get an apartment, refinance a car loan, qualify for life insurance, get your own car insurance, or get certain jobs.
As you move away from the financial interdependence of marriage and into financial independence, you may need to do some or all of the above. It's unlikely that you'll have extra cash lying around to pay higher insurance premiums or a hefty apartment deposit from bad credit, especially if financial issues were part of the root cause of the breakdown of your marriage (this is more common than most people realize).
Okay, you're saying, but how does checking my credit change my credit? Usually, it doesn't. But let's say you find some negative items misreported and are able to challenge them to get them changed. By checking your credit early on in the divorce process, you're giving yourself the gift of time to get things sorted out.
2. It's easier to get a fair division of debts and assets if you know what you owe and to whom.
Let's say someone comes to you and says, "That lottery ticket we bought together yesterday was a winner. I'll give you $100 as your part. Does that seem fair to you?" The obvious question is, "Well, was the prize $200 or was it $500 million?" If it was $200, then $100 is fair, but if it was $500 million, your friend is trying to get one over on you.
Now, I'm not suggesting that your spouse is trying to defraud you in the divorce (although sometimes that is the case). What I am suggesting is that if you don't know what you owe, you can't know how to split it in the case of a settlement, or how to ask the judge to split it if you go to trial.
Your credit report will list most or all of your outstanding debt, whether it's joint debt with your spouse or debt in your sole name. The more debt you can demonstrate you have, the better bargaining position you are in. I'm not suggesting you go out and incur MORE debt, but knowing what you already owe is absolutely key.
As a bonus, it will help you respond to discovery requests honestly, quickly, and efficiently. Discovery can be one of the more frustrating parts of litigating a divorce, so this is a plus.
3. Checking your credit will help you detect outright credit fraud by your soon-to-be-ex.
Marriage is an especially vulnerable relationship from a financial perspective. Your spouse knows your Social Security Number, your mother's maiden name, and whatever else might be necessary to take out credit in your name without authorization. If you live together, he or she may also check the mail and hide the statements from unauthorized accounts. It's a potential nightmare, although thankfully rarely carried out.
By obtaining your credit report, you will see most or all of the credit accounts open in your name, and you will instantly be able to tell if something is amiss. At that point, if something is wrong, you can decide what steps to take to protect yourself further.