Look after your credit health 

Iona Minton
Wed, 14 Sep 2005

This article is a printout from iafrica.com
Copyright © 2000 iafrica.com*, a division of Metropolis*

Is your credit health is poor, satisfactory or excellent?

Credit health is a term often used to describe whether your credit record and overall credit score is good. Almost everyone knows that a failure to pay a debt on time usually results in a default being listed on your credit record. You probably also know that a creditor can apply to court for judgment if you fail to pay after receiving a letter of demand and that this is even worse than a simple default listing. But what you may not realise is that many women face the huge problem of having to deal with credit problems caused by their husbands or ex-husbands.

If you have married in community of property, or if you sign jointly to open an account, such as a home loan, the default or judgment is listed against both the principle account holder and any other secondary account holders.

So the first question you should ask yourself is: “Am I sure my husband or ex-husband has been paying his accounts on time for the last three years?”

If you are unsure of the answer it will be well worth getting your credit rating fromwww.credithealth.co.za . They will give you a quick and clear indication of whether you have a problem with your credit health.

The problem can be far worse than a default listing. Judgments stay on your credit record for five years unless they are rescinded earlier.

We usually assume that on divorce the court order makes it clear who is responsible for paying what and that this leaves you in the clear. That’s not true. Unfortunately, the divorce order and any settlement agreement, which is made an order of court, is only binding on you and your ex-husband.

You bear the responsibility of negotiating with your creditors, and especially your bankers, to ensure that they are aware of this divorce agreement and that they remove you from the joint account. Home loan accounts are especially problematic as when your ex-husband defaults on a home loan instalment you run the risk of a High Court judgment.

Stephen Logan, the founding partner of Logan Attorneys, advises women to take two critical steps after getting their divorce order. “Firstly, make sure you change your will, otherwise your ex-husband will still benefit in the event of your death. Secondly, communicate in writing with your creditors to ensure you no longer bear any responsibility for the payment of those accounts, which in terms of the divorce order, are now his responsibility.”

Hundreds, if not thousands of women, are living with the disaster of having had a judgment taken against them resulting from their ex-husband’s failure to pay a joint account.

Logan warns: “Some judgments may be difficult to have rescinded. It is especially difficult when the relationship with the husband has soured, as getting his co-operation in having the judgment rescinded may be impossible.”

But most judgments can be rescinded and your credit health can generally be improved.

The first step lies in finding out whether you have a problem. It takes a good three to four weeks at least to sort out a problem like this, so don’t wait until you need the credit, but attend to it now. If you have a problem, get in touch with a firm of attorneys to have the judgment rescinded.

Even a clear credit record can be improved. Your credit rating is something you should take a keen interest in. Your credit health is an area easily overlooked. Pay attention to it as it holds the key as to whether you can obtain finance for that car or house. Improving it can mean that you pay a lower interest rate.