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What steps can survivors take to repair credit damaged by abusers?

Tuesday, December 29, 2015

by Amanda Manes of the National Resource Center on Domestic Violence

About Financial Abuse and Credit Repair

A significant number of survivors of domestic violence experience financial abuse (also referred to as economic abuse) as part of an abusive partner’s tactics to maintain power and control and to further isolate the victim from resources and support. Research indicates that financial abuse is experienced in 98% of abusive relationships (National Network to End Domestic Violence, 2015). Financial abuse can include limiting a partner’s access to assets, concealing information about and accessibility to family finances, withholding or stealing money, interfering with work, and other tactics. Consequently, survivors often face barriers to economic self-sufficiency, and many find themselves unable to leave an abusive partner – or forced to return – for economic reasons.

One common form of economic abuse occurs when an abusive partner intentionally damages the victim’s credit (this is also sometimes referred to as credit card fraud or credit related abuse). Credit related abuse and its impacts can be particularly devastating to a survivor because attaining financial stability and economic security is often closely linked to having good credit. If a survivor’s credit has been damaged by her abusive partner, she may struggle to secure employment, find safe housing, or access other necessary assets (like insurance, a phone, or a car) because of the incurred debt and its detrimental effects on a credit score.

A survivor may not even realize she has been the victim of credit abuse until she discovers the actual debt incurred by the abusive partner on her own credit report. This can occur in a number of ways:

  • If the survivor was married to the abuser, all debt incurred is typically considered joint debt. Even if a court orders the abuser to pay the debt as a result of a divorce decree, creditors can still hold the victim responsible. If the abuser does not make payment, her credit score can be negatively impacted.
  • Abusers might also continue to incur debt on jointly held accounts following separation. If the abuser does not make payment, the survivor can be held responsible for this debt.
  • In addition, debt can accrue when a survivor has co-signed on any loans that the abuser fails to pay or if the abuser establishes new lines of credit under the survivor’s name through access to her personal identifying information. Unless identified quickly and corrected, the survivor can be held liable for this debt (Assets for Independence Resource Center, n.d.).
What are some common tactics employed by abusers?
  • Abusers will keep assets in their name and debts in the victim’s name.
  • Abusers will track the victim’s whereabouts by accessing ATM usage, credit card usage, and banking habits.
  • Abusers can use keystroke software to obtain passwords.
  • Abusers illegally obtain credit cards in the victim’s name.
  • Abusers will keep assets in family members’ names to ensure victims have no access to the assets.
  • Abusers frequently file false income tax returns, using victim’s information.
  • Abusers will give “allowances” as the only access to money.
  • Abusers will force debt upon survivors under fraud or duress (called Coerced Debts).

(Center for Survivor Agency and Justice, 2015)

There are a number of questions a survivor can ask to determine whether she has been the victim of credit related abuse, including:

  • Are all debts in the survivor’s name?
  • Are there any signs of coerced debt (e.g. fraud, manipulation, highest cost burdens on survivor, etc.)?
  • Has the survivor recently discovered consumer accounts in their name that they were not previously aware of?
  • Does the survivor have access to enough money to pay bills/consumer debts (e.g. control of own income, access to joint accounts)(Center for Survivor Agency and Justice, 2015)?

When instances of credit fraud and credit related abuse are identified, survivors, in partnership with advocates, can begin to take the steps necessary to build financial security and move towards increased safety.  

Resources to Help Survivors Understand Credit Basics and Repair Their Damaged Credit

Many survivors of domestic violence are in need of guidance and support with respect to their finances once they have experienced financial abuse, and there are a wealth of resources that can help survivors begin to repair credit damaged by abusive partners. The Center for Survivor Agency and Justice (CSAJ), a national organization dedicated to enhancing advocacy for survivors of intimate partner violence, recently hosted a webinar series on credit, and the organization has made available the recordings and presentations from this series. Specific topics covered, which extend beyond credit repair, include:

  • Credit Reporting and Repair for Survivors: This webinar is designed to help survivors recognize credit-related economic abuse; understand credit reports, credit scores, and their purpose; protect future credit and identity; dispute and rebuild credit reports; understand credit reporting laws, rights, and new developments; and craft strategies to address credit-related challenges.
  • Credit Checks: An Illegitimate Barrier to Employment for Survivors: This webinar is designed to help survivors understand the connection between credit and employment access in the context of survivors’ lives; describe the practice of and current policies related to employment credit checks; discuss individual advocacy strategies to enhance access to employment for survivors based on credit; and develop community and systems change strategies to remove credit-related barriers to employment for survivors.
  • The Use of Identity Theft by Domestic Violence Perpetrators: This webinar focuses on the use of identity theft by domestic violence perpetrators as a method of power and control.

In addition to these webinars, CSAJ has also published a number of other resources on building and repairing credit and related issues, including a debt collection form letter that can be sent to debt collection agents to request they stop communications regarding an account; a brochure on Building and Repairing Your Credit History for survivors of domestic violence that includes information on how to repair one’s credit report and adding positive information to one’s credit report; and, Criminal Records & Employment Rights: A Tool for Advocates Working with Domestic Violence Survivors, which includes information designed to help advocates 1) better understand the employment rights of survivors who have criminal records, and 2) offer tips and resources to survivors as they prepare for the job application and interview process, attend job interviews, and respond to a decision by a prospective employer.

Many other domestic violence and related advocacy organizations also publish resources on financial management, financial abuse, and credit reporting and repair. For example, the Moving Ahead Through Financial Management curriculum, a project of the National Network to End Domestic Violence (NNEDV) in partnership with the Allstate Foundation, offers a range of information from basic money and financial management principles to advanced financial planning. Module Three of the curriculum, titled Mastering Credit Basics, explains how to access and read a credit report, as well as better understand and repair a credit score. The National Partnership for Women and Families published a fact sheet titled Losing Ground: Unwarranted Credit Checks Create Barriers to Employment for Women that highlights how credit checks used as part of the employment process “create unnecessary and harmful obstacles for women seeking gainful employment to support their families, pay their bills and pull themselves out of debt.” WomensLaw.org, a project of NNEDV, houses a Financial Abuse resource which includes information on financial abuse and credit card fraud, such as how to obtain a credit report and dispute unauthorized charges and inaccurate information.

Please visit VAWnet.org in the spring of 2016 to learn more about the intersection of Credit and Domestic Violence, as the NRCDV will be updating it Special Collection on this topic.