I can usually see it right away. A loan applicant comes in with a good application. Good income. Great employment history, a strong ability to save. But there's some bad stuff on the credit report. Late pays, maybe a charge off or two. And a little code on the credit report indicates it's a spouse with the credit problems, not the applicant. The unmarried applicant. What's up with that?

Usually it's a situation where a couple was divorced, and even though the divorce decree clearly stated who was responsible for which credit card or which mortgage, debits and defaults are still showing up on the credit report. Still showing you, the innocent applicant, as a responsible party.

If this has happened to you, if you have a situation where you jointly obligated yourself with someone else to repay on a car loan, a boat or credit card, you need to do some things before you apply for a mortgage.

Understand that a divorce decree will do little by itself to remove any joint debt from your credit history. That's you responsibility. The first thing you need to do is obtain your credit report to see if in fact your "ex" is or is not hurting your credit rating. Even though you may be making your monthly payments on time, every time, if any joint debt is showing as a derogatory account, this could seriously affect your credit and your ability to get a mortgage -- especially if you wait a long time to change the data.

If you find that indeed your credit rating has been harmed by the actions (or lack thereof) of someone in your past, be prepared to document your agreements for your lender. For instance, you'll want to provide your complete divorce decree, showing who has agreed to be responsible for what. If you have agreements from those credit companies releasing you as a responsible party, be prepared to show those as well.

Sometimes joint accounts create other problems. Let's say your past partner wanted the old house and agreed to take title as well as the mortgage payment. Unless that loan has been refinanced into the single owner's name only, you're probably still showing up as being responsible for paying the mortgage -- regardless of what your divorce decree declares.

If you see that the original mortgage is showing up as "active" on your credit report and still appears in your name, you may also find that your debt ratios for qualifying are out of whack. Why not? You credit report shows a mortgage payment on top of the one you're applying for. In this case, drag out -- again -- your divorce decree.

If you can get canceled checks for the past 12 months from your ex showing timely payments to the mortgage company, this can go a long way to show that even though the mortgage payment is still on your report, you're not the one making the payments.

Beware, though, canceled checks may only help you if the mortgage is on time. If there are late payments on that mortgage, your ex may have to refinance the old debt in its entirety before a new lender will absolve you of the old mortgage.

So don't be surprised if you find that old agreements, even court ordered ones, aren't being followed. Before you apply for a mortgage loan, take a little extra time to review your credit report. It'll be time well spent.

For more articles by David Reed, please press here.

Published: September 7, 2001

Use of this article without permission is a violation of federal copyright laws.

, a veteran Mortgage Banker, successful Real Estate Consultant and author of Your Guide to VA Loans, Mortgages 101: Quick Answers to Over 250 Critical Questions About Your Home Loan, Who Says You Can't Buy a Home!, and Mortgage Confidential: What You Need to Know That Your Lender Won't Tell You, is a former columnist and Contributing Editor with San Diego-based Mortgage Originator Magazine. Reed is President of CD Reed Mortgage Bankers, Austin, TX and is a Past President of the Austin Mortgage Bankers Association.