She liked to save. Her husband liked to spend. So whenever Joanne Tupper, a Harford County beautician, earned a little extra money, she put it in a savings account under her mother's name.
That turned out to be a good idea. When she and her husband divorced, they had a lot of debts to pay -- including some she had never even known about.
"I ended up paying them, because I didn't want his bad credit to ruin my name," she says of her husband's bills. "I knew that later I'd want to purchase a home on my own for my daughter and Ms. Tupper had the foresight to establish credit for herself before she was married. She bought a car on her own when she graduated from high school. While married, she obtained credit cards from gas stations and department stores in her own name. And she kept her credit record clean even when she had to pay her ex-husband's debts.
That foresight paid off. Eventually, she used her good credit to get a mortgage loan.
Still, many people, including college students and housewives, don't establish credit in their own names until they really need it. Then they can't get it.
"We hear a lot of horror stories from divorced women," says Gerri Detweiler, education coordinator with Bankcard Holders of America, a non-profit organization based in Virginia. "When you take out a joint account with your husband, you are responsible for it until it is closed and paid off," she says. "But say your ex-spouse doesn't pay his share of the bills, and the creditor comes after you. The divorce decree is an agreement with you and your ex-spouse. It has nothing to do with creditors. You're still liable for the debt."
And the late fees.
"All that will show on your credit reference and stay on your report for seven years," Ms. Detweiler says. Reports of bankruptcies also linger -- for 10 years.
Even a good credit record can take a beating in an acrimonious divorce, says Stephen Jennings King, an attorney in Bel Air. Each side alleges the other is responsible for debts. And each side refuses to pay.
"Meanwhile, the legal process of divorce grinds through several months," Mr. King says. "It's easy to see how their credit could go sour.
Divorced women aren't the only ones who run into credit trouble, says Ms. Detweiler.
"For students and other people in their early to mid-20s, it's very difficult to get that first [credit] card," she says. "You can have a gas or department store charge card, but it's hard to get a MasterCard or Visa if you don't have one already.
"Once you get into your 30s or 40s or older and you've never had a credit card, you're viewed with a great deal of suspicion by bank card companies. Their systems are just not set up for first-time applicants of that age," she says.
Widows often have trouble getting credit, even if they've used their husbands' credit cards for years.
"He took them out, gave her one in her name, she uses it, she
may pay for it, but legally she never signed for it," Ms. Detweiler says. "Authorized user status really means nothing as a credit reference."
The standard advice for someone trying to build a credit history from scratch, Ms. Detweiler says, is to take out a loan of a few hundred dollars at local bank, repay it and borrow some more. But many banks don't offer such small loans anymore. Anyway, most small loans won't be reported monthly to a credit bureau, the first place a creditor looks when you apply for credit.
As difficult as it may seem for people without credit to get it and keep it clean, credit experts say it can be done.
* "If you're a college student, get a college Visa or MasterCard, one especially for students offered by big banks," Ms. Detweiler says.
* Divorced or widowed women who can't get credit in their own names may qualify for a secured bank card. Applicants must deposit a few hundred dollars in a bank account, which is frozen as collateral for as long as they have the card.
Ms. Detweiler cautions that interest rates on secured cards are usually high, annual fees are high, and the interest earned on the deposit in the bank is low.
* Widows may be able to get a credit card from an issuer if their husbands were longtime customers.
"The Equal Credit Opportunity Act, a federal law, says if you're using an account with your spouse, they can't cut off your credit line if the responsible party dies," Ms. Detweiler says.
* Apply for a charge card. Using a charge card is a good way for somebody who has no experience with credit to build a credit reference, says Gail Wasserman, public affairs director at American Express Co. in New York. With charge cards like American Express, full payment usually can't be postponed.
* Do not apply for cards if you know you won't qualify for them. When a consumer applies for a bank card, the issuer notes the application as an "inquiry" on their credit report, Bankcard Holders of America says. Too many inquiries raises eyebrows. Consumers with questions about their eligibility for credit should contact the issuer before they apply.