Five steps for cleaning up your credit after divorce

One reader recently wrote:

"Since the country has recognized the banking hardships being faced today, I have received two notices reducing my credit limit on my cards to the amount that I presently owe. My maximum's on both of these cards was double what they reduced it to. I recently got a divorce and my credit file is full of bills and statements that are attributable to my ex-husband, however, I haven't had a chance to sit down, go through the list and make the corrections. I am not late, I pay these cards on time, and feel extremely angry about their arbitrary action."

Unfortunately, I hear this problem too often. Even if you are just an authorized user on the outstanding credit cards, the credit card companies can include the record on your credit report. When you know you are separating from a spouse, the first thing you should do is contact all your credit card companies, tell them about the pending divorce, ask that they freeze any joint accounts (which means no new charges will be allowed) and ask that your name be removed as an authorized user on any accounts under your spouse's name.

Separating your financial entanglements as soon as possible is critical as soon as you start a divorce process. Don't wait until the divorce is final. You could be held responsible for any debts your spouse runs up during the divorce process if you don't notify the creditors on accounts you hold jointly.