Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Divorce and Credit scores
Old 11-13-2007, 03:42 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Divorce and Credit scores

A friend of mine is is the process of separating from his wife. I think their marriage is likely to end in divorce but who knows. Right now he and his wife are on pretty amicable terms.

He wants to help his girlfriend get an expensive car by cosigning for her loan. The girlfriend doesn't have good credit and probably won't qualify for the car without his signature.

My questions are as follows.
A. Can he cosign for a loan without his wife's permission or knowledge?
B. Is there way he could cosign for the loan without affecting his wife credit. (e.g. if he and the wife were legally separated could he cosign)
C. What impact would cosigning for a loan have on his credit score how about his wife's.
D. If his girlfriend defaults and/or miss car payments what would the impact be on his and his wife's credit scores.
__________________

__________________
clifp is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-13-2007, 06:33 AM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,822
I don't know the answers to your questions, but I would suggest that he apply for any credit he may need before the divorce, not after. From my own experience, anyway, my credit was essentially non-existent after my divorce.

That was aggravating, considering that I was the one who managed our finances during the marriage and built up our credit score to begin with. My ex couldn't even write a check, and had no idea of what bills we needed to pay.

Four years after my divorce I bought a house, and suddenly my credit was golden once again and the credit card offers re-appeared in the mail and so on.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 11-13-2007, 07:01 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Dec 2004
Posts: 1,798
I second Want2retire's post as far as the credit going to bits during a divorce. It is not uncommon, I talk to many people who can trace their credit issues back to divorce.

As far as your other questions:
A, B: Credit reports are actually separate. Meaning even on a joint loan the account is reported to each persons credit report separately. There is no such animal as a joint credit report. Whatever your friend wants to sign or not sign is none of his wife's business.

C: This one is a bit tricky, because FICO is very unclear and subjective. I've heard some creditors actually lower you score by obtaining a loan form them. These are normally the "high risk" creditors or creditors of last resort. The one thing I can say for certain is it won't have any effect on his wife's score.

D: The impacts would be the same as any other defaulted loan for him. His wife's credit would not take any hits.

I might add that if the divorce is contentious he might not want to cosign anything, especially if the girlfriend is not known to the wife.
__________________
You don't want to work. You want to live like a king, but the big bad world don't owe you a thing. Get over it--The Eagles
lets-retire is offline   Reply With Quote
Old 11-13-2007, 07:23 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,871
Quote:
Originally Posted by clifp View Post
............
He wants to help his girlfriend get an expensive car by cosigning for her loan. The girlfriend doesn't have good credit and probably won't qualify for the car without his signature.................
Danger! Danger! Mr. Robinson!
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 11-13-2007, 07:40 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by clifp View Post
A friend of mine is is the process of separating from his wife...... He wants to help his girlfriend get an expensive car by cosigning for her loan. The girlfriend doesn't have good credit and probably won't qualify for the car without his signature.
Since your friend is doomed to a life of extreme agony, frustration, gloom and doom, perhaps you should do him the favor of just shooting him and putting him out of his misery. The above scenario is worse than a death wish.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 11-13-2007, 08:45 AM   #6
Thinks s/he gets paid by the post
maddythebeagle's Avatar
 
Join Date: Jun 2005
Posts: 2,450
Usually...these posts with, I have a friend...are really the OP Your "friend" will end up on Judge Judy after the girlfriend breaks up with him and stops making payments.....as others have said, you (err...your friend) and the wife have seperate credit reports....the issue with divorce is joint accounts, which always should be taken care of by removing the other person or simply closing accounts...

I frankly am amazed that people are suckered into co-signing on a loan for somebody with bad credit...
__________________
maddythebeagle is offline   Reply With Quote
Old 11-13-2007, 08:56 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Ah yes, I remember my days of thinking with the brain thats allegedly found in the smaller head.

M. Girlfriend disappears with car and stops paying, sticking friend with the payments. Wife finds out about all of it somewhere along the way and that cements the divorce. And it aint amicable any longer. Guy finds himself living in a one room efficiency apartment over a convenience store with a flickering neon light right outside his window.

N. Guy decides what he wants to do about his marriage before making a significant financial risk with someone he may not know very well at a time when he can probably ill afford two financial setbacks, then sees how the girlfriend thing works out, then when the dust is settled and he has his own finances in order and they're separate from the innocent bystander (wife), reconsiders buying the girlfriend an expensive car.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 11-13-2007, 09:28 AM   #8
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by clifp View Post
A friend of mine is is the process of separating from his wife. I think their marriage is likely to end in divorce but who knows. Right now he and his wife are on pretty amicable terms.
He wants to help his girlfriend get an expensive car by cosigning for her loan.
I think I can see one potential source of marital friction here. Maybe they could sort things out by letting the wife cosign the girlfriend's car loan?

Quote:
Originally Posted by maddythebeagle View Post
I frankly am amazed that people are suckered into co-signing on a loan for somebody with bad credit...
I wonder exactly how the guy thinks the girlfriend is going to reciprocate. Does the car loan buy her continued acquiescence? Is it intended to be a sign of his financial commitment to her, even though apparently his wife still has a higher emotional/marital commitment? Is it just a blatant blackmailcommercial transaction of material items for continued silence? Is a car perceived to be a better deal than gem equity?

Quote:
Originally Posted by maddythebeagle View Post
Usually...these posts with, I have a friend...are really the OP Your "friend" will end up on Judge Judy after the girlfriend breaks up with him and stops making payments.....as others have said, you (err...your friend)
Cute insinuation, Maddy-- but you've been paying enough attention to his posts to know that ClifP's not married, right?
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 11-13-2007, 09:28 AM   #9
Recycles dryer sheets
 
Join Date: May 2007
Posts: 121
I'd encourage him to buy the most expensive car he can sign for. He should also sign an expensive lease for her, go into hock for jewelry etc..
__________________
limpid lizard is offline   Reply With Quote
Old 11-13-2007, 09:31 AM   #10
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,822
Quote:
Originally Posted by cute fuzzy bunny View Post
Ah yes, I remember my days of thinking with the brain thats allegedly found in the smaller head.

M. Girlfriend disappears with car and stops paying, sticking friend with the payments. Wife finds out about all of it somewhere along the way and that cements the divorce. And it aint amicable any longer. Guy finds himself living in a one room efficiency apartment over a convenience store with a flickering neon light right outside his window.
And no credit at all (so no ability to rent a nicer place, even with money in hand), and creditors calling him all night long for bills his ex-spouse said she would pay as part of the divorce agreement, and swears she paid.

Quote:
Originally Posted by cute fuzzy bunny View Post
N. Guy decides what he wants to do about his marriage before making a significant financial risk with someone he may not know very well at a time when he can probably ill afford two financial setbacks, then sees how the girlfriend thing works out, then when the dust is settled and he has his own finances in order and they're separate from the innocent bystander (wife), reconsiders buying the girlfriend an expensive car.
And wonders why he would feed a gold digger like that anyway, now that he is divorced and available? There are LOTS of extraordinarily attractive fish in the sea and no matter how much of a dweeb he is, he could do better.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 11-13-2007, 09:55 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,871
Momma said "Remember that's a downspout not a compass"
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 11-13-2007, 10:48 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by clifp View Post
A friend of mine is is the process of separating from his wife. I think their marriage is likely to end in divorce but who knows. Right now he and his wife are on pretty amicable terms.

He wants to help his girlfriend get an expensive car by cosigning for her loan. The girlfriend doesn't have good credit and probably won't qualify for the car without his signature.
I would say with certainty his marriage WILL end in divorce if he has a GIRLFRIEND already, don't you think??

Quote:
My questions are as follows.
A. Can he cosign for a loan without his wife's permission or knowledge?
To my knowledge, NO, unless he is legally seperated....

Quote:
B. Is there way he could cosign for the loan without affecting his wife credit. (e.g. if he and the wife were legally separated could he cosign)
I am thinking yes, but maybe Martha knows........

Quote:
C. What impact would cosigning for a loan have on his credit score how about his wife's.
It helps the girlfriend's credit but could lower his score if she is late with payments..........

Quote:
D. If his girlfriend defaults and/or miss car payments what would the impact be on his and his wife's credit scores.
Bad, and depending on which state, the wife could raise heck with the soon to be ex or his new girlfriend........

Just an aside, your friend is NOT legally seperated, HAS a girlfriend. and is trying to impress the "new squeeze" by buying her an expensive car under his wife's nose?

Sounds like your friend is heading down the scary: "what's mine is mine and what's YOURS is mine too" divorce path.............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 11-13-2007, 11:47 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,423
If he co-signs the loan for the GFs expensive car (that she obviously cannot afford) and then goes back to the wife and they do not divorce, the now ex-GF has a fantastic tool for revenge. Just stop making payments and ruin the ex-BFs credit.

Instead of co-signing for the loan, he could buy a car and loan the car to the GF. That way if he goes back to the wife at least he could give her the slightly used car as a make-up gift.

Seriously, sounds like the man has a few character flaws. Does the GF with the credit problems happen to look like his wife did 20 years ago?
__________________
Sue J is offline   Reply With Quote
Old 11-13-2007, 02:03 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
I'm with YouBet. This guy should just go to a local hospital and ask that his organs be harvested pronto, while there is something to harvest.

This sounds like a Sopranos episode teaser. Is the GF perchance a Russian emigré?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 11-13-2007, 02:54 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by haha View Post
I'm with YouBet. This guy should just go to a local hospital and ask that his organs be harvested pronto, while there is something to harvest.

This sounds like a Sopranos episode teaser. Is the GF perchance a Russian emigré?

Ha
He's going to end up like a certain Mr. Bobbit..........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 11-13-2007, 03:28 PM   #16
Recycles dryer sheets
 
Join Date: Jul 2006
Posts: 91
I wouldn't co-sign for anything for ANYONE, unless I planned to make the payments myself. Huge mistake.

And if his wife finds out about this, there is a reason for the *amicable* divorce to quickly become a nasty one.
__________________
Callie is offline   Reply With Quote
Old 11-13-2007, 06:16 PM   #17
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,169
Quote:
Originally Posted by clifp View Post
A friend of mine is is the process of separating from his wife. I think their marriage is likely to end in divorce but who knows. Right now he and his wife are on pretty amicable terms.

He wants to help his girlfriend get an expensive car by cosigning for her loan. The girlfriend doesn't have good credit and probably won't qualify for the car without his signature.

My questions are as follows.
A. Can he cosign for a loan without his wife's permission or knowledge?
B. Is there way he could cosign for the loan without affecting his wife credit. (e.g. if he and the wife were legally separated could he cosign)
C. What impact would cosigning for a loan have on his credit score how about his wife's.
D. If his girlfriend defaults and/or miss car payments what would the impact be on his and his wife's credit scores.
Sounds like the best situation your friend could be in. He tells her NO and she goes away and he doesn't end up with a second divorce in a couple of years because of her bad credit habits which remain with him past the second divorce.
__________________
Tadpole is offline   Reply With Quote
Old 11-13-2007, 06:35 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
I loved the comments pretty funny, or they would be if the situation wasn't so sad.

This really is a friend of mine since I am single and based on stuff like this likely to remains so!. I know all parties involved and the wife and the GF actually are/were? friends. The wife is being extraordinarily reasonable about the whole situation, which is actually even more complicated than I described. At least a movie of the week calibre.

However, what I am reading is that as long as he co-signs for the loan and doesn't involve the wife, his wife's credit rating should be unaffected. On the other hand want2retire experience that her credit suffered right after divorce seems really common.

So let me ask slightly different question. Are there any tips people have for a couple getting a divorcee regarding their credit rating? Sounds like closing joint accounts is on the list anything else.
__________________
clifp is offline   Reply With Quote
Old 11-13-2007, 06:39 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Quote:
Originally Posted by clifp View Post
The wife is being extraordinarily reasonable about the whole situation
Uh oh.

I think the biggy on the credit rating is that a whole bunch of it is based on the length of the longest open accounts and the ratings on those. When you get divorced and close the joint accounts, those disappear and only your individual accounts fully 'count'.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 11-13-2007, 06:45 PM   #20
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,822
Quote:
Originally Posted by clifp View Post
I loved the comments pretty funny, or they would be if the situation wasn't so sad.

This really is a friend of mine since I am single and based on stuff like this likely to remains so!. I know all parties involved and the wife and the GF actually are/were? friends. The wife is being extraordinarily reasonable about the whole situation, which is actually even more complicated than I described. At least a movie of the week calibre.

However, what I am reading is that as long as he co-signs for the loan and doesn't involve the wife, his wife's credit rating should be unaffected. On the other hand want2retire experience that her credit suffered right after divorce seems really common.

So let me ask slightly different question. Are there any tips people have for a couple getting a divorcee regarding their credit rating? Sounds like closing joint accounts is on the list anything else.
Unfortunately, it's not simple. I could only wish it had been! Creditors get really nervous in a divorce, and they all want to be first in line for whatever money you have, and it doesn't matter if you have had a sterling credit history and continue to pay reliably. It might help a little to pay off every cent you owe everybody before you divorce, and to eliminate any need to borrow anything from anyone for several years.

Truthfully, I don't personally know anyone who has got through a divorce with credit unscathed; even those with no loans outstanding seem to have a harder time getting credit for a little while. The divorced women I've known took a much bigger hit on their credit than their ex-husbands, for whatever reasons. Maybe that is due to lesser income, or maybe other reasons.

ETA: I think CFB made a good point! That is probably a lot of it. We only had joint accounts. On the other hand, my daughter (aged 18 at the time, and in college) got several offers for credit cards each month that were delivered to the house. I needed a CC, but could not get one despite 23 years of nearly perfect payment records. She had never even balanced a checkbook, much less made payments for anything.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Question about credit scores David1961 FIRE and Money 28 10-06-2007 11:34 AM
Financial advisor scores another victim samclem FIRE and Money 4 07-21-2006 11:58 PM
Cheney Shoots, Scores REWahoo Other topics 76 02-25-2006 08:03 PM
FICO Scores gwix98 Other topics 8 01-05-2006 10:54 AM
Frugality (and real estate) scores another win wabmester FIRE and Money 18 10-24-2005 08:15 PM

 

 
All times are GMT -6. The time now is 12:03 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.