Can an ex's debt problems affect your credit rating?

I recently split up with someone who had quite bad debt problems, we lived together and had a joint current account. Could this have affected my credit score?

Credit reports are linked to individuals rather than to addresses.

However, what counts in the eyes of banks and potential lenders is whether couples who have parted ways continue to be financially linked.

Being financially linked

A shared bank account, credit card, mortgage or other financial product links two individuals in the eyes of credit reference agencies.

Where this is the case some lenders will search both the file of the applicant and that of the person they are linked to.

This could potentially pose a problem when the linked individual has bad debts or other past problems recorded by the reference agency (missed payments, for example).

Joint current accounts count

People often think that current accounts don't make a difference to credit reports but this isn't true: lenders increasingly take them into account.

Most current accounts in the market can be used as joint accounts and how a shared current account was used may have an affect on credit worthiness. For example, many reference agencies record whether the account was often overdrawn.

Banks also share details of current accounts' overdraft balances, overdraft limits and the status of the account.

According to May '10 research from Tesco, the majority of couples (56%) still prefer to maintain a degree of financial independence by not pooling all of their resources.

According to the same research, 47% share a savings account with their partner but just 34% are willing to share credit cards and only 30% are willing to share a life insurance policy.

However, as we've noted above, sharing any one of these products can lead to a couple becoming financially linked.

Improving credit worthiness

Luckily, being financially linked is an issue which can be resolved fairly easily: closing joint accounts means that potential lenders will only search the file of the individual applying for credit.

Those keen to make an application could check their credit file before going ahead and inform them if the information is still unchanged.

Notice of dissociation

If you no longer hold an account but it's still listed on a credit file it's also worth noting that it's possible to make a credit application completely independent by completing a Notice of Dissociation with a credit reference agency.

To apply, you have to prove that you have no active financial connection with the person registered at your address.

If successful, the notice will then filter out the information about the third party so lenders won't be able to see it.

General credit worthiness

Many aspects of credit worthiness relate to stability.

Signing up to the electoral roll, being employed by the same company, living at the same address and being with the same bank for a long time are all helpful.

Cancelling unused credit cards and accounts can also help.

The flip side of that is that moving out of a property can make applicants for credit a less attractive proposition.

Lenders use the electoral roll to check the names and addresses of people applying for credit so calling to confirm that an ex partner no longer lives at the address will help to prevent them from applying for credit using the old address.

Many people find that obtaining a copy of their credit report helps to ensure that they're getting a full picture of their finances. Mistakes are sometimes made by the credit reference agencies that are easily rectified.

There are three credit agencies to check scores with: Experian , Callcredit and Equifax .

Checking with them is recorded on your file but can't be seen by lenders. As a rule of thumb, it's worth checking every year and a half or before any major credit application.

Our guide to accessing credit reports has more detail on getting hold of these accounts cheaply or free.

Liability for a partner's debt

Finally, it's worth noting that unless you jointly entered into a credit agreement you should not be liable for a former partner's debts.

However, this may well be the case where you both entered into a contract.

For example, if a mortgage is in two names and one party cannot or refuses to pay, action will be taken against both parties.

Note that there's also liability if a partner is or was an additional credit cardholder: in this case the primary cardholder is liable for the whole debt, even if it was run up solely by the additional cardholder.