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A mixed credit file can happen during and after the divorce when your ex-spouse's credit information continues to appear on your credit report. It could be possible that your ex was late on some payments, and the creditors continue to report it as a late payment on your credit report. Another possibility is that your ex misused your credit information to get a loan, or a creditor's AI system automatically attached your name. This is why the separation of finances is a must during a divorce. A mixed credit file can hurt your credit score, and you may not be able to get a new car or home loan, or credit card. You need to improve your credit score. The good news is that you can get non-relevant information removed from your credit report as credit bureaus are legally obligated to do so.
A mixed credit file or mixed credit report is a credit report that shows someone else's credit accounts and information on yours. This individual could be your former partner, a family member, or a fraudster. Having someone else's credit information for a loan that you haven't co-signed can reduce your credit score. If they are delinquent on their accounts, it could affect your payment history. If they have maxed out their credit cards, it can show up as a high credit utilization rate on your credit report. It can not only hurt your credit score but also your opportunity to get a new credit card or loan. Even if you can get a new credit card or loan, it will be the one with high fees and interest.
An argument in favor of a mixed credit file can be that if the other party pays their loans on time, it can improve your credit score as well. While it may seem tempting, it might not be worth it. The other person may have financial difficulties in the future, thus hurting your credit report as well.
You can end up with a mixed credit file due to several reasons. Below is a list of some of the common reasons you can end up with one.
A mixed credit file can happen during and after the divorce when your ex-spouse's credit information continues to appear on your credit report. It could be possible that your ex was late on some payments, and the creditors continue to report it as a late payment on your credit report. Another possibility is that your ex misused your credit information to get a loan, or a creditor's AI system automatically attached your name. This is why the separation of finances is a must during a divorce. A mixed credit file can hurt your credit score, and you may not be able to get a new car or home loan, or credit card. The good news is that you can get non-relevant information removed from your credit report as credit bureaus are legally obligated to do so.
A mixed credit file or mixed credit report is a credit report that shows someone else's credit accounts and information on yours. This individual could be your former partner, a family member, or a fraudster. Having someone else's credit information for a loan that you haven't co-signed can reduce your credit score. If they are delinquent on their accounts, it could affect your payment history. If they have maxed out their credit cards, it can show up as a high credit utilization rate on your credit report. It can not only hurt your credit score but also your opportunity to get a new credit card or loan. Even if you can get a new credit card or loan, it will be the one with high fees and interest.
An argument in favor of a mixed credit file can be that if the other party pays their loans on time, it can improve your credit score as well. While it may seem tempting, it might not be worth it. The other person may have financial difficulties in the future, thus hurting your credit report as well.
You can end up with a mixed credit file due to several reasons. Below is a list of some of the common reasons you can end up with one.
Divorce
If you recently went through a divorce, the court order may not have been fully implemented by creditors and credit bureaus. Thus leaving your and your spouse's credit files combined. Usually, it can take 30 to 90 days for a court order to be fully implemented.
Misuse by Former Spouse
If you are divorced or separated, your former spouse may have access to your date of birth and social security number. They might have opened a credit or loan account right after or before the final divorce decree. A disgruntled ex can potentially open an account even after the divorce. Or they haven't notified their financial institution of the divorce. Some spouses might intentionally fail to disclose assets and liabilities during the financial disclosure. Any of these actions can put your name on a mixed credit file.
Identity Fraud
Identity fraud is very common these days. Not only the actions of your ex, but also hackers getting access to your name, Social Security Number, or birthdate can open credit accounts under your name. It will result in the account showing up in your name on your credit report even though you have no knowledge of it.
Data Entry Errors
Creditors usually outsource data entry to third parties. Some of the data entry teams might be outside the country. With the amount of information they handle, mistakes can happen. They may mistype a Social Security number or misspell or swap first, middle and last names. Some issuers may use artificial intelligence software to open and assign authorized users. Or they may assign a payment to the wrong account. Any of these activities can create an inaccurate credit file.
Family Members With Similar Name
In some cultures, it is very common for some of the family members to have the same name. For example, they may have the same first and last name and their middle name is the actual name in their culture. Similar could be true for an extended family member or a person from the same origin. When those names are used to apply for a loan here, a lender can get easily confused and make an error. That can result in a comingled file.
Name Changes
Name changes are done usually after a divorce or marriage. Sometimes, we change our name for cultural, family, or religious reasons. Regardless, if you haven't notified your creditors about the name change it can result in a mixed credit file. On the other hand, you may end up with multiple credit files that do not reflect your true credit history.
Name Variations
Name variations are another reason that can result in a mixed credit file or multiple credit files. For example, a Robert Smith may have accounts opened under Bob Smith, Rob Smith, and Robert Smith. This can confuse lenders and result in a mixed credit file or multiple credit files.
While it is annoying to have a mixed credit file, fixing it is a very simple process. Go to annualcreditreport.com and get a copy of your free credit report from all three credit bureaus - Equifax, Experian, and TransUnion.
Contact Creditors
Identify all the credit accounts and lenders on your three credit reports. Contact them and notify them of the mixed credit report situation. This way creditors can close down all the disputed accounts to limit further damage. Then work with the creditors to get all those accounts off your name.
Contact Credit Bureaus
All three credit bureaus have launched National Consumer Assistance Plan to manage disputes like these. You will need need to open a dispute with them and identify all the incorrect information. Provide them with as much information as possible. After they investigate the matter, they will remove the disputed information from your credit report and your credit score will improve significantly.
Credit Freeze
To prevent further abuse, you can also freeze your credit for 1 year with the three credit bureaus. This way no one can open an account under your number. If you need to get a new credit card or loan, you can unfreeze your credit for the duration of the approval and then freeze it again.
Protect Your Personal Data
Protect your personal data such as name, social security, and date of birth from everyone. Do not share it with anyone unless you are applying for a credit card or a loan.
Related:
How to Improve Credit Score After Divorce
Financial Matters During A Divorce
How to get a mortgage after a divorce?
How to get a credit card after divorce?
Warning: This post is neither financial, health, legal, or personal advice nor a substitute for the advice offered by a professional. These are serious matters, and the help of a professional is recommended as it can impact your future.