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If you have shared finances with somebody in the past, they might show up on your credit record. If you don't want this to happen, you can apply for a notice of disassociation. Find out more about how this works.
What is a notice of disassociation?
A notice of disassociation is something you can request from the credit reference agencies. You should ask for one when a financial association you had with someone, a loan with an ex-partner for example, ends. You are requesting that you and the other person are no longer formally financially linked.
You may not have heard of financial disassociation, but it can make a real difference to you if your current or ex-spouse or partner has a high level of debt. Why? Because it can affect your ability to get credit in the future too.
If you’ve been turned down for credit, and you have no idea why, your first port of call should be the credit reference agencies, Experian, Equifax and Callcredit. These companies hold financial information on you and anyone financially associated to you. We’ll talk about that some more later on, but for now let’s look at what financial association is and why could it lead to you being turned down for credit?
You become financially associated when you apply for things jointly, with your spouse, partner, flat mate or another family member, for any of the following:
· bank account
· credit card
· loan application
or you have a joint CCJ against you.
Reading through this list, it’s easy to see how you’d be financially associated with your partner or spouse, just by merging your finances. But, there are times when you can live with someone and not be financially associated with them too.
When are you not financially associated?
You are not considered financially associated if you:
· live with someone
· shared a utility account with another person, like gas or electricity
· live with your spouse or partner, but you don’t have any kind of credit account with them
And running a business with another person is also not considered to be financial association either.
How does financial association affect me?
When you apply for credit, one of the first things the lender will do is check your credit history with one of the credit reference agencies listed above. They do this to see how likely they are to get their money back, if they lend it to you. When they access your credit file and they’re able to see the details of the people you are financially associated with.
If your current or ex-partner or spouse has lots of debt, or they’re paying late, part-paying or missing payments out altogether, it doesn’t directly affect your credit score, but it is something that the new lender will look at. The lender may see this as a red flag and decide that lending you any more money is too risky.
It can work both ways
But it’s not all doom and gloom. If you’re still with your partner or spouse, and they have a great credit score, better than yours, it could work in your favour and help you get credit in the future.
What can you do about it?
So, if you’ve split up from your partner, and they have high levels of debt, you may want to disassociate yourself financially from them too. Even if they don’t have problem debt, it’s still better to end any financial associations if a relationship has come to an end. This will stop their debt affecting your ability to get credit in the future. You won’t be able to disassociate yourself from them if you still have an active credit account in joint names though. So if you’ve split from a partner but still have a joint loan that will have to be paid off before you can apply for disassociation.
Apply for disassociation is easy to do! The credit reference agencies allow you to submit what’s called notice of disassociation. This allows you to remove the link between you and your ex, so that their financial issues no longer affect your chances of getting credit. You can access the forms you require here:
And remember, you will need to contact each credit reference agency separately, as they act individually and, generally, don’t share information.
by Shelley BowersBack to blog home