Divorce or Separation

How to break the ties that bind

If you have been married, or lived as a couple with someone for any length of time, you are likely to have applied for credit together and had joint financial commitments, perhaps a joint mortgage or other loan, a joint bank account or a joint credit card.

When you part company these links remain on your credit file unless amended. And they must stay there if you continue to have a joint mortgage or loan, for example.

But if you no longer have any joint financial arrangements, the ties can be broken. This does not happen automatically, even if you sort out your finances and are legally divorced. You have to ask the credit reference agency to create what is called a 'disassociation'.

Update your records

f you do nothing you could find that within the next six years, when you apply for credit, your ex-partner's credit history will be taken into account - because you have not updated the records which still show you to be financially connected. If he or she has a poor credit history, this could affect your ability to get credit.

You might also find that members of his or her family and any new partner are linked to you, because they may have the same surname you have or had, or because they are linked to your ex-partner in the same way you are and they share your previous address.

If you do not want to be linked to your ex-partner in this way, check what joint finances you have. You can start this process by getting a copy of your file from the credit reference agency.

Arrange with the lenders or anyone else involved, maybe the television rental, utility or mobile phone company, to change the credit agreements. This may not always be straightforward.

ne of you might have to sign over the mortgage to the other, for example. Or you might have to pay off one loan and take out another. You may find you owe each other money.

Who is liable for what?

Even if it gets complicated, it is worth doing. Most lenders are quite used to this situation and will help you sort matters out. Talk to them about your new circumstances. It is often in their interest to make sure that loans are not forgotten and that everyone involved knows who is liable for what. If you are consulting a solicitor, he or she will help if necessary.

Once all financial ties have been severed - remember maintenance payments for children do not count as a financial connection - contact the credit reference agency and arrange for the file link to be broken with a 'disassociation'.

They will also help you if you find you cannot break all financial ties with your ex-partner, but feel potential lenders should know that you are no longer a couple. In these circumstances, and while negotiations with your ex-partner are going on, you might be advised to add a Notice to your file explaining the situation.