Unpaid joint car loan sullies ex's credit

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Dear To Her Credit,
My fiance and I broke up. We have a car in both our names. There were many late payments due to financial troubles. Both our credit scores understandably got hurt. I'm the one who was in charge of getting the money to the bank. Though his name was on the loan, making him legally accountable, he had no idea of the late payments as I did not tell him so he wouldn't worry. Now I have called the bank to see if we could write a letter so he could have a good will adjustment, but they said no. Is there anything I can do to get this off his credit score? I know he is legally accountable but not morally. I just want to leave him in a good spot.  -- Samantha


Dear Samantha,
Despite the fact that you were in charge of making the car payments, you were both legally responsible for making sure they actually got paid. From the bank's perspective, it doesn't matter who promised to make the payments, who drove the car or who got the car when you broke up. What matters is that the bank relied on both of your incomes and credit histories to approve the original loan, and you both signed the contract.

Stories such as these are the reason I recommend that people think twice before entangling their personal finances with people other than trusted spouses. Following that advice would certainly prevent a lot of problems. I'd go so far as to say that most financial troubles I hear about are the result of relationship troubles. If two people are not ready to make a legal commitment, and to avail themselves of the legal protections that go along with that legal status, they are not ready to buy a house or car together. They're certainly not ready to have a joint checking account or to add each other to their credit card accounts.

As you can see now, not telling your fiance when you couldn't keep up with the payments didn't do him any favors. He'd have been much better off having the chance to worry at the time, when he could have done something to preserve his credit history. Maybe he could have found extra work, cut back on other expenditures or even sold the car. It would have been better than the situation he is in now.

The best thing you can do now to improve your fiance's credit score now is to make sure the car loan is paid in full or at least bringing the payments current. Unpaid debt on your credit report hurts your credt score a lot more than an old debt that's been brought into good standing.

Whatever you do, don't let the car be repossessed. That would hurt both of your scores even worse. If you own a car that you can't afford, the best way out is to sell it and get one that is in your price range --for cash, if possible.

You and your ex-fiance can attach notes to your credit files explaining the financial troubles, if you want. For example, you can note if one of you was in the hospital or unemployed. There's not much to be gained by noting that your fiance wasn't "really" responsible for the debt, however. The only way to not really be responsible for a debt is to not sign on the loan in the first place.

It's thoughtful of you to want to leave your ex-fiance in a good spot. Unfortunately, there's nothing you can do to take true, negative marks off a credit history -- yours or anyone else's. Take care of your credit from now on, and your credit will get better as every month goes by.

See related: Closing joint bank accounts after a breakup

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Updated: 03-23-2019