Credit Reports in Divorce

Credit reports are an often underutilized tool in family law cases, yet there are a few compelling reasons to make them a part of your process — especially early on in a case.

Credit reports contain all sorts of nuggets that can be useful as away to uncover hidden debts, marital versus separate debt, violations of Court-ordered payments, and a clients’ creditworthiness for evaluating the reliability of your receivables.

A credit report generally contains:

• Revolving credit accounts, such as credit cards

• Installment loans, such as mortgages and auto loans, including the dates they were opened, balances, payment history,  status (current or past due), and credit limits

• Bankruptcies

• Medical debts (that have gone to collections)

• Unpaid child or spousal support (if defaulted)

• Collection accounts

It’s not uncommon for one spouse to obtain credit in another spouse’s name without them knowing. It is important for your clients to check and monitor their credit reports during the divorce process. They should monitor it with all three national credit bureaus — Experian, EquiFax, and TransUnion— because not all creditors report to all three bureaus. Here’s how:

□ Your clients can attain a free copy of their credit report from each of the three credit bureaus every 12 months at AnnualCreditReport.com

□ They can create a free EquiFax account to get six free credit reports every year

□ They can get a free credit report from Experian by creating a free account

□ And they can request free TransUnion credit reports, too.

Although it may be illegal to do so, the opposing party may run a credit report on your client. Your client may want to freeze their credit reports to prevent this. But pro-actively checking your client’s credit report for both the state of their financial health, and to ensure no one is accessing it without their permission, is a powerful tool to use early on in the divorce process. 

If you have any questions about any of the above, or any questions at all related to the sale of the home in your cases, please feel free to reach out to me. I’m here to help.