Do we have recource if someone uses us as credit reference and we are being hounded? How?

No, all she is doing is saying you can provide information as to whether she should be given any credit. Since you do not like her and will say nothing positive, doing so was not wise on her part. The people calling you should be told you are listed as a reference and not a guarantor so their bothering you beyond asking what you think of her as a credit risk is in violation of the fair credit collection laws and you are hanging up and demand they not contact you again. As to your son, he has to tell the people involved as to his security clearance, etc., that they are getting divorced and her behavior should not reflect upon him.

Well of course you can tell the collectors that you never agreed to take any responsibility for your estranged daughter-in-law's debts (if that is the truth). If they continue to hound you, find your state's consumer protection agency, and/or its commissioner of banking. Depending on the state, these agencies promulgate rules which limit the extent to which collectors can trouble you. And in my experience they act vigorously when they receive a presumptively valid complaint. You might have some ground on which to sue them, but you should not have to go to the trouble and expense. You might consult a Consumer Rights lawyer or bankruptcy lawyer in your locality.

Your son needs to tell his divorce lawyer. Besides that, all you can do is tell and write the creditors and the credit bureau if necessary. Good luck.

Notify the credit bureaus. You are only responsible for things that you sign.