Splitting up, pre-nups and your credit report

Posted in 'Personal Finance' by Richard Catlin

03 September 2010

Pre-nuptial agreements, which specify how marital assets should be divided in the event of a split, are set for a review later this year, aimed at bringing their legal status into line with Europe and the US.

Pre-nuptial agreements are not officially binding in UK courts as the law stands today, though they can still be used as a guide for the division of assets in a split.

Robbie Williams supposedly became the latest celebrity to sign a pre-nup with new wife Ayda Field last month, protecting his estimated £80 million fortune.

Having to divide up vast fortunes, yachts, and mansions in the event of separation isn’t really something that most of us have to worry about, but when a relationship ends one thing all couples should be aware of, is protecting their credit rating.

Marriage and divorce rates in the UK have been in decline for some time now - with the number of people getting married in 2008 at the lowest level since records began – and the number of co-habiting couples has increased. An estimated 1 in 6 couples were co-habiting in 2006 - a figure that is likely to have increased further since.

The majority of long-term couples living together will share a financial association of some kind, be that through a mortgage, loan, joint account or even a TV rental. This association appears on both parties’ credit files, and is visible to lenders whenever they run a search. When lenders assess you and when there is a financial association on file, the two files are combined together and looked at as one – which means your credit rating is either bolstered or weakened depending on the financial standing of your better half.

What is not generally known is that when a relationship comes to an end, any financial association will remain firmly where it is, unless action is taken to remove it.

Thankfully, it’s a relatively painless process to remove any financial association that is no longer relevant from your credit file.

By checking your credit file with checkmyfile - based on all three credit reference agencies - you’ll be able to check for unwanted financial associations, discover how lenders rate you, and make sure all the information is correct. Should you find that you are still associated with an ex partner (or perhaps even a family member or former housemate) we can help guide you to lodge the required notice with the credit reference agencies to remove the association.

Check your credit file for financial associations